The Networked Readiness Index 2015: Taking the Pulse of ... · 2/20/2015 · citizen-centric...

The Global Information Technology Report 2015 | 3

CHAPTER 1.1

The Networked Readiness Index 2015: Taking the Pulse of the ICT RevolutionATTILIO DI BATTISTA, World Economic Forum

SOUMITRA DUTTA, Cornell University

THIERRY GEIGER, World Economic Forum

BRUNO LANVIN, INSEAD

When The Global Information Technology Report, was created in 2001, it was based on two key premises, which still apply today. First, information and communication technologies (ICTs) were becoming more powerful, more accessible, and more widespread. Second, they were playing a key role in enhancing competitiveness, enabling development, and bringing progress to all levels of society.

The past 15 years have provided ample evidence of these advances. Countries such as the Republic of Korea, Israel, and Estonia have based their national competitiveness on ICT products and services. The spread of ICTs have also had wide societal impact, especially on less-privileged segments of society. For example, farmers in developing countries have benefited from new ICT services such as real-time information about commodity prices and weather, and from the ease of money transfers. The effectiveness of governments has increased as a result of their ability to provide citizen-centric online services and to involve citizens in governance. ICTs have become key enablers of business and employment creation, and of productivity growth. For these reasons, ICTs have significant potential for supporting inclusive growth.

The results of the Networked Readiness Index (NRI), presented in this chapter, along with Chapter 1.2, which reviews the empirical literature on the impact of ICTs, provide additional evidence of this progress. But these same results reveal that, so far, it is mostly the rich countries that have been benefiting from the ICT revolution. Paradoxically, ICTs have opened up new digital divides. Although Internet access is expanding, 61 percent of the world’s population are not connected yet. The distribution of high-speed broadband and the use of mobile applications and advanced data services varies widely across and within economies. And although schools and firms increasingly have access to the Internet, the skills required to leverage ICTs remain woefully inadequate in many organizations.

The question of whether opportunities offered by ICTs are inclusive by nature or whether they are likely to increase the distance between the haves and the have-nots is a pertinent one. Some segments of the population may be exposed differently than others to labor market shifts induced by technological innovation, which can aggravate inequalities across groups with different levels of skills. Progress made in improving national competitiveness may create or deepen domestic inequalities if the unconnected become second-class citizens. In the absence of corrective mechanisms (e.g., specific policies to connect all citizens and give them access to relevant skills), ICTs could indeed contribute to a non-inclusive type of growth, thus exacerbating the problem rather than mitigating it.

Under the theme “ICTs for inclusive growth,” this year’s Report showcases compelling solutions and makes policy recommendations for avoiding the pitfalls,

1.1: The Networked Readiness Index 2015

4 | The Global Information Technology Report 2015

bridging the divides, and allowing everyone to benefit from, and participate in, the ICT revolution.

THE NETWORKED READINESS FRAMEWORKIt is widely acknowledged that productivity is a critical determinant of economic growth. In fact, a number of empirical studies show that differences in productivity growth account for cross-country growth variations even more than capital or labor accumulation.1 As the World Economic Forum’s research on competitiveness has shown, the determinants of productivity are many and complex.2 Empirical evidence shows that, among these determinants, ICT use is a key driver of innovation, especially in advanced economies where other sources of productivity gains have dried up or produce lower returns.3

As a general-purpose technology, ICTs have an impact that extends well beyond productivity gains. ICTs act as a vector of social development and transformation by improving access to basic services, enhancing connectivity, and creating employment opportunities. In these ways ICTs affect how people live, communicate, interact, and engage among themselves and with their governments.

For these reasons, measuring the extent to which ICTs are used and understanding the determinants of ICT adoption have been the object of much research since the early 2000s. In 2001, the World Economic Forum launched the Global Information Technology Report series and the Networked Readiness Index (NRI). This represented one of the first attempts to make conceptual sense of the complex ICT reality, identifying the common factors that enable countries to use technology effectively. The networked readiness framework that underpins the NRI was intended to provide guidance to policymakers on the factors that they need to take into account to fully leverage ICTs in their growth strategies.

In recent years, the debate has moved from the issue of ensuring access to the question of how to make the best use of ICTs in order to improve business innovation, governance, citizens’ political participation, and social cohesion. In light of this shift in emphasis, and after two years of research and consultations with experts, the Impact subindex was added to the NRI framework in 2012.4 Yet measuring the actual impact of ICTs remains a very arduous task, as data remain scarce. In addition, the complex relationships between ICTs and socioeconomic performance are not fully understood and their causality not fully established. However, our hope is to highlight the opportunities offered by ICTs and provide an indication of how they are transforming economies and societies around the world.

The networked readiness framework, presented in Figure 1, rests on six principles:

1. A high-quality regulatory and business environment is critical in order to fully leverage ICTs and generate impact.

2. Similarly, ICT readiness—as measured by ICT affordability, skills, and infrastructure—is a pre-condition to generating impact.

3. Fully leveraging ICTs requires a society-wide effort. All stakeholders—the government, the business sector, and the population at large—have a role to play.

4. ICT use should not be an end in itself. The impact that ICTs actually have on the economy and society is what ultimately matters.

5. The set of drivers—the environment, readiness, and use—interact, co-evolve, and reinforce each other to create greater impact. In turn, greater impact creates more incentives for countries to further improve their framework conditions, their readiness for ICTs, and their use of ICTs, thus creating a virtuous cycle. Conversely, weaknesses in any particular dimension are likely to hinder progress in others.

6. Finally, the networked readiness framework should provide clear policy guidance.

THE NETWORKED READINESS INDEX: STRUCTURE AND METHODOLOGYThe networked readiness framework translates into the Networked Readiness Index (NRI), a composite indicator made up of four main categories (subindexes), 10 subcategories (pillars), and 53 individual indicators distributed across the different pillars:

A. Environment subindex1. Political and regulatory environment (9 indicators)2. Business and innovation environment (9 indicators)

B. Readiness subindex3. Infrastructure (4 indicators)4. Affordability (3 indicators)5. Skills (4 indicators)

C. Usage subindex6. Individual usage (7 indicators)7. Business usage (6 indicators)8. Government usage (3 indicators)

D. Impact subindex9. Economic impacts (4 indicators)

10. Social impacts (4 indicators)

A description of each subindex and pillar is provided below, along with the rationale for their inclusion. The appendix presents detailed information on the composition and computation of the NRI.5



Environment subindexThe success of a country in leveraging ICTs depends in part on the quality of the overall operating environment. The Environment subindex therefore assesses the extent to which a country’s market conditions and regulatory framework support entrepreneurship, innovation, and ICT development.

The Political and regulatory environment pillar assesses the extent to which a country’s political and regulatory environments facilitate ICT penetration and the development of business activities. It does so by measuring the extent of intellectual property rights protection, prevalence of software piracy, the efficiency and independence of the judiciary, the efficiency of the law-making process, and the overall quality of regulations pertaining to ICTs.

The Business and innovation environment pillar gauges the extent to which the business environment supports entrepreneurship by taking into account measures of red tape, the ease of starting a business, and taxation. It also measures the conditions that allow innovation to flourish by including indicators on the overall availability of technology, the intensity of competition, the demand conditions for innovative products (as proxied by the development of government procurement of advanced technology products), and the availability of venture capital for funding innovation-related projects.

Readiness subindexThe Readiness subindex measures the extent to which a country has in place the infrastructure and other factors supporting the uptake of ICTs.

The Infrastructure pillar captures the state of a country’s ICT infrastructure as well as infrastructure that matters for ICT development: mobile network coverage,

international Internet bandwidth, secure Internet servers, and electricity production.

The Affordability pillar assesses the affordability of ICTs in a country through measures of mobile telephony usage costs and broadband Internet subscription costs, as well as an indicator that assesses the state of liberalization in 17 categories of ICT services, because more intense competition tends to reduce retail prices in the long run.

The Skills pillar measures the capacity of the population to make effective use of ICTs by taking into account the enrollment rate in secondary education, the overall quality of the education system, and of mathematics and science education in particular, and adult literacy.

Usage subindexThe Usage subindex assesses the extent of ICT adoption by a society’s main stakeholders: government, businesses, and individuals.

The Individual usage pillar measures the level of diffusion among a country’s population, using mobile telephony penetration, Internet usage, personal computer ownership, and the use of social networks.

The Business usage pillar captures the extent to which businesses in a country use the Internet for business-to-business and business-to-consumer operations, as well as their efforts to integrate ICTs in their operations. It also measures the capacity of firms to come up with new technologies by taking into account the number of patent applications under the Patent Cooperation Treaty (PCT). Finally, it measures the extent of staff training as a proxy for the capacity of management and staff to innovate.

The Government usage pillar assesses the leadership and success of the government in developing and implementing strategies for ICT development, as

Infrastructure

Affordability Skills

Individual

Environment

DRIVERS

Business Government

IMPACT

Economic

Social

Readiness Usage

Figure 1: The Networked Readiness framework



well as in using ICTs, as measured by the availability and quality of government online services.

Impact subindexThe Impact subindex gauges the broad economic and social impacts accruing from ICTs.

The Economic impacts pillar aims to measure the effect of ICTs on the economy through technological and non-technological innovations in a country—as measured by the number of patent applications as well as by the role of ICTs in the development of new products, processes, and organizational models. It also measures the overall shift of an economy toward more knowledge-intensive activities.

The Social impacts pillar aims to assess a country’s societal progress brought about or enhanced by the use of ICTs. Such progress includes—but is not limited to—access to education and healthcare, energy savings, and more-active civil participation. Currently, because of data limitations, this pillar focuses on assessing the extent to which ICTs allow access to basic services (education, financial services, and healthcare); the use of the Internet at school, as a proxy for the potential benefits that are associated with the use of ICTs in education; the impact of ICTs on government efficiency; and the quality and usefulness of information and services provided by a country for the purpose of engaging its citizens in public policymaking through the use of e-government programs.

Measuring the impacts of ICTs remains a complex task, and the development of rigorous, international comparable statistics is still in its infancy. As a result,

many of the areas where ICTs have a significant impact—especially those where the impact does not translate directly into commercial activities, as is the case in environment, healthcare, and education—are not captured in the NRI. Therefore the Impact subindex should be regarded as work in progress.

Methodology and dataThe overall structure of the NRI remains unchanged from the previous edition. The only minor adjustment is the exclusion of the indicator Accessibility of digital content, which used to be included in the Infrastructure pillar. The NRI is now composed of 53 individual indicators. This adjustment, however, does not affect the ability to compare the 2015 results with earlier results, back to 2012.

About half of the individual indicators used in the NRI are sourced from international organizations. The main providers are the International Telecommunication Union (ITU); the United Nations Educational, Scientific and Cultural Organization (UNESCO); other UN agencies; and the World Bank. Carefully chosen alternative data sources, including national sources, are used to fill data gaps in certain cases. The other half of the NRI indicators are derived from the World Economic Forum’s Executive Opinion Survey (the Survey). The Survey is used to measure concepts that are qualitative in nature or for which internationally comparable statistics are not available for enough countries.6

The Survey is completed annually by over 13,000 business executives in all the economies included in the NRI (see Browne et al. 2014 for more details). The Survey

The United Nations E-Government Survey has been conducted since 2003 by the United Nations Division of Public Administration and Development Management in order to assess the development of e-government across three main dimensions: telecommunication infrastructure; human capacity; and availability of online services. The results of the E-Government Survey feed into the calculation of a number of indicators, including the Government Online Service Index and the E-Participation Index, both of which are included in the Networked Readiness Index (NRI). Although the conceptual framework of the E-Government Survey has remained the same since 2003, it has been adapted to the evolving nature of e-government through some methodological changes.

The Government Online Service Index captures a government’s performance in delivering online services to its citizens. The 2014 edition measures the provision of basic e-services, governments’ attention to e-participation, multichannel service delivery, usage expansion, adoption of open data initiatives, whole-of-government approach, and digital divides. It focuses more than previous editions on e-participation in particular, and on the presence of open data initiatives on government websites. The basket of basic services provided by public administration has also been expanded to include environmental e-information.

The E-Participation Index assesses the extent to which governments leverage digital technologies to improve civic participation through the provision of e-information, the launch of e-consultation initiatives, and use of e-decision making. The 2014 version of the E-Government Survey expanded the assessment of e-participation so as to include also the use of e-government programs to engage citizens in public policymaking and implementation. The survey was updated to improve the accuracy of the information collected on e-consultation and e-decision-making initiatives. New questions and updates were also made to better assess data publishing and sharing by government agencies; the availability of information on the citizens’ rights to access government information; the provision of outcome on feedback received from citizens concerning the improvement of its online services; and the provision of tools in order to obtain public opinion for public policy deliberation through social media, online polls, petition tools, voting tools, online-bulletin boards, and online discussion forums.

The Government Online Service Index and the E-Participation Index provide useful information for the NRI’s government usage and social impacts pillars. Further information about these indicators is available in the Technical Notes and Sources.

Box 1: Measuring e-government and e-participation: The UN E-Government Survey



represents a unique source of insight into many critical aspects related to a country’s operating environment. These include the extent of red tape and the degree of intellectual property protection; aspects related to the population’s capacity to leverage ICTs; its use of technology and its capacity to innovate; the importance of its government’s vision for ICTs; and the contribution of ICTs to the development of new products and services and to improving access to basic services.

The computation of the overall NRI score is based on successive aggregations of scores: individual indicators are aggregated to obtain pillar scores, which are then combined to obtain subindex scores. Subindex scores are in turn combined to produce a country’s overall NRI score. In order to aggregate the individual indicators, scores of each indicator are normalized onto a common scale ranging from 1 to 7. Scores for indicators derived from the Survey are always measured on a 1-to-7 scale and therefore do not require transformation prior to aggregation. At each aggregation level, a simple average (i.e., an arithmetic mean) is used to combine components, with a few exceptions, which are flagged in the appendix.

The revision of the computation methodology for certain individual indicators has caused significant shifts in the results for several countries. The methodologies underpinning indicators 8.02 Government Online Service Index and 10.04 E-Participation Index, both computed by the United Nations, have been revised (see Box 1). Similarly, the International Comparison Programme has revised the methodology used to compute the purchasing power parity (PPP) conversion factor.

This factor is used to compute the PPP estimates of telephony and Internet tariffs (indicators 4.01 and 4.02, respectively).7 As a result, PPP estimates are not comparable with those published in previous editions and, in some countries, differ significantly, even if tariffs in local currency have not changed.

For two indicators, the number of missing data points remains very high. Indicators 1.07 Software piracy rate and 9.04 Knowledge-intensive jobs are missing data for 38 and 25 economies, respectively. For each of the other 51 indicators of the NRI, the number of missing data points does not exceed four. In addition, in the absence of data on adult literacy (indicator 5.04) for as many as 22 OECD member countries and for Hong Kong SAR, a rate of 99 percent was assumed for the purpose of calculating the Skills pillar score.

Country coverageWhen it comes to country coverage, the objective is to include as many economies as possible. The inclusion of an economy depends on the availability and quality of indicators. To be included in the NRI, the number of missing (or outdated) data points for an economy cannot exceed five, or 10 percent of all indicators. Because almost half of the indicators entering the NRI are

derived from the Executive Opinion Survey, the capacity to conduct the Survey in a country is therefore a necessary—but not sufficient—condition for its inclusion.

The NRI 2015 covers 143 economies, which together account for 98.4 percent of world GDP. Benin, Bosnia and Herzegovina, Brunei Darussalam, Ecuador, and Liberia—all covered in the 2014 edition—have not been included this year because the Survey data for these countries are not available. Sierra Leone was also excluded, although Survey data do exist for that country, because too many data points were missing for other indicators. Tajikistan has been reinstated.

THE NETWORKED READINESS INDEX 2015: ANALYSIS AND KEY FINDINGSThis section begins with an overview of the NRI 2015 results, including a brief analysis of regional patterns and trends. It then presents some of the key findings and messages from this year’s edition and concludes with a short assessment of the performance of selected countries.

Results overviewTables 1–5 report the results (ranks and values) for the overall NRI 2015, its four subindexes, and their respective pillars. Table 1 also contains the country classifications used throughout the analysis. Scores are reported with a precision of one decimal, but rankings were derived from the exact figures.

Not unexpectedly, advanced economies are better than developing ones at leveraging ICTs. High-income economies dominate the NRI, taking the first 31 places in the overall NRI rankings (see Table 1). The performance of countries in the NRI largely mirrors their position on the development ladder: a higher level of income is typically associated with a higher NRI score (see Figure 2). Forty-four of the 50 high-income economies covered in the NRI rank in the top 50, which

100 1,000 10,000 100,0001

2

3

4

5

6

7R 2 = 0.77

Figure 2: Networked readiness and income

Sources: World Economic Forum; World Bank 2015.Note: N = 138 economies.

NRI 2

015

sco

re

GNI per capita, 2013, US$ (log scale)



2014 rank Rank Country/Economy Value (out of 148) Income level* Group†

1 Singapore 6.0 2 HI ADV 2 Finland 6.0 1 HI-OECD ADV 3 Sweden 5.8 3 HI-OECD ADV 4 Netherlands 5.8 4 HI-OECD ADV 5 Norway 5.8 5 HI-OECD ADV 6 Switzerland 5.7 6 HI-OECD ADV 7 United States 5.6 7 HI-OECD ADV 8 United Kingdom 5.6 9 HI-OECD ADV 9 Luxembourg 5.6 11 HI-OECD ADV 10 Japan 5.6 16 HI-OECD ADV 11 Canada 5.5 17 HI-OECD ADV 12 Korea, Rep. 5.5 10 HI-OECD ADV 13 Germany 5.5 12 HI-OECD ADV 14 Hong Kong SAR 5.5 8 HI ADV 15 Denmark 5.5 13 HI-OECD ADV 16 Australia 5.5 18 HI-OECD ADV 17 New Zealand 5.5 20 HI-OECD ADV 18 Taiwan, China 5.5 14 HI ADV 19 Iceland 5.4 19 HI-OECD ADV 20 Austria 5.4 22 HI-OECD ADV 21 Israel 5.4 15 HI-OECD ADV 22 Estonia 5.3 21 HI-OECD ADV 23 United Arab Emirates 5.3 24 HI MENAP 24 Belgium 5.3 27 HI-OECD ADV 25 Ireland 5.2 26 HI-OECD ADV 26 France 5.2 25 HI-OECD ADV 27 Qatar 5.1 23 HI MENAP 28 Portugal 4.9 33 HI-OECD ADV 29 Malta 4.9 28 HI ADV 30 Bahrain 4.9 29 HI MENAP 31 Lithuania 4.9 31 HI EDE 32 Malaysia 4.9 30 UM EDA 33 Latvia 4.7 39 HI ADV 34 Spain 4.7 34 HI-OECD ADV 35 Saudi Arabia 4.7 32 HI MENAP 36 Cyprus 4.7 37 HI ADV 37 Slovenia 4.6 36 HI-OECD ADV 38 Chile 4.6 35 HI-OECD LATAM 39 Barbados 4.6 55 HI LATAM 40 Kazakhstan 4.5 38 UM CIS 41 Russian Federation 4.5 50 HI CIS 42 Oman 4.5 40 HI MENAP 43 Czech Republic 4.5 42 HI-OECD ADV 44 Puerto Rico 4.5 41 HI — 45 Mauritius 4.5 48 UM SSA 46 Uruguay 4.5 56 HI LATAM 47 Macedonia, FYR 4.4 57 UM EDE 48 Turkey 4.4 51 UM EDE 49 Costa Rica 4.4 53 UM LATAM 50 Poland 4.4 54 HI-OECD EDE 51 Panama 4.4 43 UM LATAM 52 Jordan 4.3 44 UM MENAP 53 Hungary 4.3 47 UM EDE 54 Croatia 4.3 46 HI EDE 55 Italy 4.3 58 HI-OECD ADV 56 Montenegro 4.3 52 UM EDE 57 Azerbaijan 4.3 49 UM CIS 58 Armenia 4.2 65 LM CIS 59 Slovak Republic 4.2 59 HI-OECD ADV 60 Georgia 4.2 60 LM CIS 61 Mongolia 4.2 61 LM EDA 62 China 4.2 62 UM EDA 63 Romania 4.2 75 UM EDE 64 Colombia 4.1 63 UM LATAM 65 Sri Lanka 4.1 76 LM EDA 66 Greece 4.1 74 HI-OECD ADV 67 Thailand 4.0 67 UM EDA 68 Moldova 4.0 77 LM CIS 69 Mexico 4.0 79 UM LATAM 70 Trinidad and Tobago 4.0 71 HI LATAM 71 Ukraine 4.0 81 LM CIS 72 Kuwait 4.0 72 HI MENAP

2014 rank Rank Country/Economy Value (out of 148) Income level* Group†

73 Bulgaria 4.0 73 UM EDE 74 Seychelles 4.0 66 UM SSA 75 South Africa 4.0 70 UM SSA 76 Philippines 4.0 78 LM EDA 77 Serbia 4.0 80 UM EDE 78 Morocco 3.9 99 LM MENAP 79 Indonesia 3.9 64 LM EDA 80 El Salvador 3.9 98 LM LATAM 81 Tunisia 3.9 87 UM MENAP 82 Jamaica 3.9 86 UM LATAM 83 Rwanda 3.9 85 LI SSA 84 Brazil 3.9 69 UM LATAM 85 Vietnam 3.9 84 LM EDA 86 Kenya 3.8 92 LI SSA 87 Cape Verde 3.8 89 LM SSA 88 Bhutan 3.7 94 LM EDA 89 India 3.7 83 LM EDA 90 Peru 3.7 90 UM LATAM 91 Argentina 3.7 100 UM LATAM 92 Albania 3.7 95 UM EDE 93 Guyana 3.7 88 LM LATAM 94 Egypt 3.6 91 LM MENAP 95 Dominican Republic 3.6 93 UM LATAM 96 Iran, Islamic Rep. 3.6 104 UM MENAP 97 Lao PDR 3.6 109 LM EDA 98 Kyrgyz Republic 3.5 118 LM CIS 99 Lebanon 3.5 97 UM MENAP 100 Honduras 3.5 116 LM LATAM 101 Ghana 3.5 96 LM SSA 102 Namibia 3.5 105 UM SSA 103 Venezuela 3.4 106 UM LATAM 104 Botswana 3.4 103 UM SSA 105 Paraguay 3.4 102 LM LATAM 106 Senegal 3.3 114 LM SSA 107 Guatemala 3.3 101 LM LATAM 108 Gambia, The 3.3 107 LI SSA 109 Bangladesh 3.3 119 LI EDA 110 Cambodia 3.3 108 LI EDA 111 Bolivia 3.3 120 LM LATAM 112 Pakistan 3.3 111 LM MENAP 113 Suriname 3.2 113 UM LATAM 114 Zambia 3.2 110 LM SSA 115 Côte d’Ivoire 3.2 122 LM SSA 116 Uganda 3.2 115 LI SSA 117 Tajikistan 3.2 — LI CIS 118 Nepal 3.2 123 LI EDA 119 Nigeria 3.2 112 LM SSA 120 Algeria 3.1 129 UM MENAP 121 Zimbabwe 3.1 117 LI SSA 122 Gabon 3.0 128 UM SSA 123 Tanzania 3.0 125 LI SSA 124 Lesotho 3.0 133 LM SSA 125 Swaziland 3.0 126 LM SSA 126 Cameroon 3.0 131 LM SSA 127 Mali 3.0 127 LI SSA 128 Nicaragua 2.9 124 LM LATAM 129 Mozambique 2.9 137 LI SSA 130 Ethiopia 2.9 130 LI SSA 131 Libya 2.9 138 UM MENAP 132 Burkina Faso 2.8 136 LI SSA 133 Malawi 2.8 132 LI SSA 134 Timor-Leste 2.8 141 LM EDA 135 Madagascar 2.7 139 LI SSA 136 Yemen 2.7 140 LM MENAP 137 Haiti 2.5 143 LI LATAM 138 Mauritania 2.5 142 LM MENAP 139 Myanmar 2.5 146 LI EDA 140 Angola 2.5 144 UM SSA 141 Burundi 2.4 147 LI SSA 142 Guinea 2.4 145 LI SSA 143 Chad 2.3 148 LI SSA

Note: Income level classification follows the World Bank classification by income (situation as of July 2014). Group classification follows the International Monetary Fund’s classification (situation as of October 2014).

* Income groups: HI = high-income economies that are not members of the OECD; HI-OECD = high-income OECD members; UM = upper-middle-income economies; LM = lower-middle-income economies; LI = low-income economies.

† Groups: ADV = Advanced economies; CIS = Commonwealth of Independent States; EDA = Emerging and developing Asia; EDE = Emerging and developing Europe; LATAM = Latin America and the Caribbean; MENAP = Middle East, North Africa, and Pakistan; SSA = Sub-Saharan Africa.

Table 1: The Networked Readiness Index 2015



Table 2: Environment subindex and pillars

ENVIRONMENT SUBINDEX

Rank Country/Economy Value Rank Value Rank Value

1 Singapore 5.9 2 5.9 1 6.0 2 New Zealand 5.7 1 5.9 6 5.4

3 Finland 5.6 4 5.8 11 5.4 4 United Kingdom 5.5 5 5.7 9 5.4

5 Hong Kong SAR 5.5 12 5.4 3 5.6 6 Norway 5.5 6 5.6 7 5.4

7 Netherlands 5.5 7 5.5 8 5.4 8 Canada 5.4 11 5.4 4 5.5

9 Switzerland 5.4 9 5.5 10 5.4 10 Luxembourg 5.4 3 5.8 27 5.0

11 United Arab Emirates 5.4 20 5.1 2 5.7 12 Ireland 5.3 14 5.3 13 5.3

13 Sweden 5.3 10 5.4 19 5.2 14 United States 5.3 21 5.0 5 5.5

15 Qatar 5.3 17 5.3 16 5.3 16 Denmark 5.2 16 5.3 18 5.2

17 Australia 5.2 15 5.3 23 5.1 18 Japan 5.2 8 5.5 35 4.9

19 Germany 5.1 13 5.4 31 4.9 20 Malaysia 5.1 23 5.0 21 5.1

21 Belgium 5.1 22 5.0 24 5.1 22 Iceland 5.0 27 4.9 17 5.2

23 Estonia 5.0 26 4.9 25 5.0 24 Austria 5.0 18 5.2 43 4.7

25 Israel 5.0 28 4.6 15 5.3 26 France 4.8 25 5.0 45 4.7

27 Chile 4.8 35 4.3 14 5.3 28 Taiwan, China 4.8 38 4.3 12 5.3

29 Saudi Arabia 4.8 32 4.5 26 5.0 30 Portugal 4.8 33 4.4 20 5.2

31 South Africa 4.8 24 5.0 55 4.5 32 Rwanda 4.7 19 5.2 71 4.3

33 Mauritius 4.7 31 4.5 38 4.8 34 Korea, Rep. 4.6 42 4.1 22 5.1

35 Puerto Rico 4.6 29 4.6 49 4.6 36 Malta 4.6 30 4.5 51 4.6

37 Barbados 4.5 37 4.3 40 4.8 38 Jordan 4.5 39 4.2 36 4.9

39 Cyprus 4.5 41 4.1 30 4.9 40 Bahrain 4.5 45 4.1 29 5.0

41 Latvia 4.5 48 4.1 28 5.0 42 Lithuania 4.5 49 4.1 33 4.9

43 Oman 4.5 36 4.3 46 4.7 44 Turkey 4.4 54 3.9 37 4.9

45 Zambia 4.4 64 3.8 32 4.9 46 Macedonia, FYR 4.4 59 3.9 39 4.8

47 Czech Republic 4.3 44 4.1 58 4.5 48 Hungary 4.3 46 4.1 57 4.5

49 Uruguay 4.3 51 4.0 56 4.5 50 Spain 4.3 60 3.9 47 4.7

51 Slovenia 4.2 81 3.6 34 4.9 52 Panama 4.2 73 3.6 41 4.8

53 Poland 4.2 65 3.8 54 4.6 54 Indonesia 4.2 62 3.8 59 4.5

55 Kazakhstan 4.2 61 3.9 61 4.5 56 Montenegro 4.1 90 3.5 42 4.8

57 Jamaica 4.1 58 3.9 65 4.4 58 Croatia 4.1 87 3.5 44 4.7

59 Namibia 4.1 34 4.4 103 3.8 60 Thailand 4.1 89 3.5 48 4.7

61 Ghana 4.1 50 4.0 88 4.1 62 Georgia 4.0 76 3.6 62 4.4

63 Russian Federation 4.0 79 3.6 63 4.4 64 Romania 4.0 72 3.7 66 4.3

65 Cape Verde 4.0 55 3.9 90 4.0 66 Costa Rica 4.0 63 3.8 78 4.1

67 Slovak Republic 4.0 78 3.6 64 4.4 68 Mongolia 4.0 94 3.4 60 4.5

69 Kuwait 3.9 74 3.6 70 4.3 70 Guyana 3.9 68 3.7 73 4.2

71 Botswana 3.9 47 4.1 106 3.8 72 Kenya 3.9 66 3.8 89 4.1



73 Lao PDR 3.9 53 3.9 96 3.9 74 Azerbaijan 3.9 69 3.7 79 4.1

75 Bhutan 3.9 43 4.1 114 3.7 76 Bulgaria 3.9 108 3.2 50 4.6

77 China 3.9 52 4.0 104 3.8 78 Armenia 3.9 107 3.2 53 4.6

79 Seychelles 3.9 56 3.9 101 3.8 80 Morocco 3.9 71 3.7 83 4.1

81 Mexico 3.9 70 3.7 87 4.1 82 Gambia, The 3.8 40 4.2 126 3.5

83 El Salvador 3.8 85 3.5 75 4.2 84 Philippines 3.8 75 3.6 85 4.1

85 Lesotho 3.8 67 3.7 93 3.9 86 Sri Lanka 3.8 77 3.6 92 4.0

87 Senegal 3.8 92 3.5 82 4.1 88 Greece 3.8 106 3.2 68 4.3

89 Trinidad and Tobago 3.8 99 3.4 76 4.2 90 Italy 3.8 102 3.3 72 4.2

91 Dominican Republic 3.7 101 3.4 80 4.1 92 Tajikistan 3.7 57 3.9 123 3.5

93 Iran, Islamic Rep. 3.7 100 3.4 86 4.1 94 Albania 3.7 113 3.1 69 4.3

95 Côte d’Ivoire 3.7 84 3.5 99 3.9 96 Peru 3.7 117 3.0 67 4.3

97 Colombia 3.7 98 3.4 94 3.9 98 Vietnam 3.6 93 3.5 105 3.8

99 Guatemala 3.6 118 3.0 74 4.2 100 Serbia 3.6 110 3.1 84 4.1

101 India 3.6 82 3.6 115 3.7 102 Kyrgyz Republic 3.6 114 3.1 81 4.1

103 Tunisia 3.6 96 3.4 108 3.8 104 Ukraine 3.6 122 3.0 77 4.2

105 Mali 3.6 91 3.5 116 3.7 106 Uganda 3.6 86 3.5 117 3.6

107 Lebanon 3.5 139 2.5 52 4.6 108 Malawi 3.5 80 3.6 128 3.4

109 Honduras 3.5 109 3.2 102 3.8 110 Swaziland 3.5 88 3.5 125 3.5

111 Brazil 3.5 95 3.4 121 3.6 112 Moldova 3.5 124 3.0 91 4.0

113 Ethiopia 3.5 105 3.2 110 3.8 114 Tanzania 3.5 83 3.6 130 3.4

115 Cameroon 3.5 112 3.1 107 3.8 116 Nepal 3.4 120 3.0 100 3.9

117 Pakistan 3.4 121 3.0 97 3.9 118 Burkina Faso 3.4 103 3.3 122 3.5

119 Mozambique 3.4 104 3.3 120 3.6 120 Nigeria 3.4 116 3.1 111 3.8

121 Madagascar 3.4 126 2.9 95 3.9 122 Cambodia 3.4 119 3.0 113 3.7

123 Egypt 3.3 115 3.1 124 3.5 124 Gabon 3.3 111 3.1 129 3.4

125 Bolivia 3.3 97 3.4 135 3.2 126 Paraguay 3.3 133 2.6 98 3.9

127 Timor-Leste 3.2 129 2.7 109 3.8 128 Argentina 3.2 128 2.8 118 3.6

129 Nicaragua 3.2 123 3.0 131 3.4 130 Bangladesh 3.2 135 2.6 112 3.7

131 Zimbabwe 3.1 125 2.9 132 3.3 132 Suriname 3.1 130 2.7 127 3.5

133 Libya 3.0 142 2.4 119 3.6 134 Algeria 3.0 127 2.9 136 3.1

135 Yemen 2.9 140 2.5 133 3.2 136 Burundi 2.9 136 2.5 134 3.2

137 Haiti 2.9 134 2.6 137 3.1 138 Mauritania 2.8 131 2.7 139 3.0

139 Myanmar 2.7 132 2.7 141 2.8 140 Guinea 2.7 137 2.5 140 2.9

141 Venezuela 2.6 143 2.2 138 3.0 142 Chad 2.5 138 2.5 143 2.5

143 Angola 2.5 141 2.4 142 2.6

Political and Business and regulatory innovation environment environment

Political and Business and regulatory innovation environment environment



Table 3: Readiness subindex and pillars

READINESS SUBINDEX

Rank Country/Economy Value Rank Value Rank Value Rank Value

1 Finland 6.7 5 7.0 9 6.6 1 6.5 2 Taiwan, China 6.4 1 7.0 13 6.5 23 5.8 3 Iceland 6.4 6 7.0 25 6.3 13 5.9 4 Sweden 6.4 3 7.0 18 6.4 28 5.7 5 Norway 6.4 1 7.0 27 6.2 12 5.9 6 Austria 6.3 12 6.6 5 6.7 27 5.7 7 Australia 6.3 6 7.0 28 6.2 17 5.9 8 Singapore 6.3 19 6.2 30 6.1 2 6.5 9 Germany 6.2 13 6.6 41 5.9 10 6.1 10 Switzerland 6.2 10 6.8 65 5.4 3 6.4 11 Canada 6.2 6 7.0 60 5.5 9 6.1 12 United States 6.1 4 7.0 53 5.6 33 5.6 13 Denmark 6.0 20 6.2 33 6.1 19 5.8 14 Belgium 6.0 21 6.1 56 5.6 4 6.3 15 Japan 6.0 17 6.3 43 5.8 15 5.9 16 Korea, Rep. 6.0 11 6.6 45 5.8 39 5.5 17 Hong Kong SAR 6.0 28 5.8 20 6.4 22 5.8 18 Netherlands 6.0 14 6.4 72 5.3 6 6.2 19 Luxembourg 5.9 18 6.3 50 5.7 18 5.8 20 Cyprus 5.9 30 5.6 34 6.1 11 6.0 21 United Kingdom 5.9 15 6.3 51 5.7 31 5.6 22 Estonia 5.8 23 6.1 62 5.5 16 5.9 23 Slovenia 5.8 25 5.9 58 5.6 24 5.8 24 New Zealand 5.8 9 6.9 101 4.2 7 6.2 25 Malta 5.7 16 6.3 76 5.1 29 5.7 26 France 5.7 24 6.0 73 5.2 14 5.9 27 Russian Federation 5.6 39 5.0 15 6.5 52 5.3 28 Ukraine 5.6 46 4.7 10 6.6 36 5.6 29 Ireland 5.6 26 5.9 87 4.7 8 6.1 30 Poland 5.6 36 5.1 26 6.2 43 5.4 31 Lithuania 5.6 50 4.6 22 6.3 25 5.7 32 Italy 5.5 37 5.0 36 6.0 37 5.6 33 Portugal 5.5 41 4.9 35 6.0 34 5.6 34 Spain 5.5 33 5.3 40 5.9 56 5.3 35 Kazakhstan 5.5 49 4.6 11 6.6 49 5.4 36 Czech Republic 5.5 22 6.1 80 5.0 53 5.3 37 Israel 5.4 31 5.6 68 5.3 48 5.4 38 Latvia 5.4 43 4.8 47 5.8 32 5.6 39 Croatia 5.4 47 4.7 42 5.9 40 5.5 40 Bahrain 5.3 35 5.2 66 5.4 41 5.5 41 Turkey 5.3 53 4.6 8 6.6 80 4.8 42 Mongolia 5.3 75 4.0 6 6.7 55 5.3 43 Mauritius 5.3 77 3.9 3 6.7 50 5.4 44 Armenia 5.3 57 4.4 31 6.1 54 5.3 45 Georgia 5.3 59 4.3 7 6.6 78 4.9 46 Macedonia, FYR 5.3 58 4.4 29 6.1 64 5.2 47 Romania 5.2 52 4.6 59 5.5 38 5.5 48 Serbia 5.2 42 4.8 61 5.5 66 5.1 49 Montenegro 5.2 45 4.7 75 5.2 35 5.6 50 Panama 5.2 63 4.3 19 6.4 82 4.8 51 Costa Rica 5.2 91 3.3 16 6.4 26 5.7 52 Trinidad and Tobago 5.1 67 4.3 52 5.7 46 5.4 53 Moldova 5.1 69 4.2 37 6.0 71 5.0 54 United Arab Emirates 5.1 27 5.8 114 3.6 21 5.8 55 Barbados 5.0 38 5.0 100 4.3 20 5.8 56 Qatar 5.0 29 5.7 126 3.1 5 6.3 57 Puerto Rico 5.0 80 3.8 14 6.5 87 4.7 58 Mexico 5.0 81 3.7 4 6.7 92 4.5 59 Colombia 4.9 68 4.2 55 5.6 77 4.9 60 Greece 4.9 40 5.0 96 4.4 58 5.3 61 Seychelles 4.9 44 4.7 93 4.5 42 5.4 62 Oman 4.9 61 4.3 67 5.4 75 4.9 63 Malaysia 4.9 70 4.2 79 5.1 57 5.3 64 Azerbaijan 4.9 60 4.3 77 5.1 68 5.1 65 Slovak Republic 4.8 71 4.1 69 5.3 69 5.1 66 Kuwait 4.8 48 4.6 85 4.8 70 5.0 67 Uruguay 4.8 51 4.6 74 5.2 84 4.7 68 Hungary 4.8 65 4.3 86 4.8 47 5.4 69 Tunisia 4.8 86 3.4 32 6.1 76 4.9 70 Sri Lanka 4.8 110 2.7 38 6.0 30 5.6 71 Bulgaria 4.8 34 5.2 110 3.8 60 5.3 72 Venezuela 4.7 93 3.2 12 6.5 90 4.5

READINESS SUBINDEX


73 Thailand 4.7 66 4.3 84 4.9 73 5.0 74 Chile 4.7 54 4.5 91 4.5 72 5.0 75 Saudi Arabia 4.7 32 5.4 122 3.2 45 5.4 76 China 4.7 92 3.2 57 5.6 59 5.3 77 Jamaica 4.6 78 3.9 71 5.3 83 4.7 78 Bhutan 4.6 72 4.1 44 5.8 106 3.9 79 Argentina 4.6 62 4.3 n/a n/a 79 4.9 80 El Salvador 4.6 74 4.0 63 5.4 97 4.3 81 Jordan 4.6 96 3.0 70 5.3 44 5.4 82 Kyrgyz Republic 4.6 100 3.0 39 6.0 86 4.7 83 India 4.6 115 2.6 1 7.0 102 4.1 84 Vietnam 4.5 127 2.1 2 6.8 88 4.6 85 Philippines 4.5 73 4.1 103 4.2 61 5.3 86 Iran, Islamic Rep. 4.5 97 3.0 46 5.8 85 4.7 87 Morocco 4.5 87 3.4 24 6.3 110 3.8 88 Albania 4.4 84 3.5 92 4.5 65 5.2 89 Paraguay 4.4 64 4.3 81 5.0 105 3.9 90 Egypt 4.3 99 3.0 17 6.4 118 3.6 91 Brazil 4.3 56 4.5 89 4.6 108 3.9 92 Cape Verde 4.3 104 2.9 83 5.0 74 4.9 93 Peru 4.3 90 3.3 78 5.1 96 4.3 94 Libya 4.2 76 3.9 98 4.3 93 4.4 95 Suriname 4.2 55 4.5 119 3.4 81 4.8 96 Indonesia 4.2 98 3.0 99 4.3 63 5.2 97 Algeria 4.2 83 3.7 94 4.5 94 4.4 98 Lebanon 4.1 82 3.7 117 3.4 51 5.3 99 Guyana 4.1 103 2.9 102 4.2 62 5.2 100 Bangladesh 4.0 109 2.8 21 6.3 125 3.0 101 Lao PDR 4.0 107 2.8 64 5.4 112 3.7 102 South Africa 4.0 85 3.5 107 4.1 95 4.4 103 Cambodia 3.9 108 2.8 48 5.7 120 3.3 104 Nepal 3.9 133 1.9 23 6.3 117 3.6 105 Honduras 3.9 113 2.6 82 5.0 101 4.1 106 Dominican Republic 3.9 88 3.3 97 4.4 104 4.0 107 Kenya 3.8 94 3.1 106 4.1 100 4.1 108 Uganda 3.8 112 2.7 54 5.6 126 3.0 109 Pakistan 3.6 119 2.5 49 5.7 133 2.6 110 Bolivia 3.6 102 2.9 120 3.3 91 4.5 111 Ghana 3.5 124 2.3 105 4.1 103 4.0 112 Gabon 3.3 118 2.6 108 3.9 116 3.6 113 Nicaragua 3.3 79 3.8 134 2.4 114 3.7 114 Namibia 3.3 101 3.0 123 3.2 113 3.7 115 Rwanda 3.3 106 2.8 111 3.7 121 3.2 116 Botswana 3.3 114 2.6 131 2.6 89 4.6 117 Guatemala 3.2 95 3.0 124 3.1 119 3.5 118 Côte d’Ivoire 3.2 89 3.3 127 3.0 123 3.2 119 Zimbabwe 3.2 128 2.1 n/a n/a 99 4.2 120 Yemen 3.1 129 2.0 88 4.7 134 2.5 121 Lesotho 3.1 130 2.0 121 3.3 107 3.9 122 Swaziland 3.0 116 2.6 136 2.2 98 4.2 123 Nigeria 3.0 121 2.3 104 4.1 135 2.5 124 Tajikistan 3.0 136 1.6 137 2.1 67 5.1 125 Tanzania 3.0 117 2.6 112 3.7 132 2.6 126 Timor-Leste 2.8 105 2.9 129 2.8 130 2.8 127 Gambia, The 2.8 125 2.2 128 3.0 122 3.2 128 Myanmar 2.8 131 2.0 n/a n/a 115 3.6 129 Senegal 2.7 120 2.5 130 2.6 128 2.9 130 Mozambique 2.6 137 1.3 90 4.6 140 2.1 131 Angola 2.6 122 2.3 118 3.4 138 2.2 132 Burundi 2.6 123 2.3 133 2.4 124 3.1 133 Ethiopia 2.6 135 1.7 113 3.6 137 2.3 134 Guinea 2.5 134 1.8 115 3.6 141 2.1 135 Haiti 2.5 142 1.0 116 3.5 127 3.0 136 Cameroon 2.4 141 1.2 132 2.4 111 3.7 137 Zambia 2.4 132 2.0 138 1.6 109 3.8 138 Chad 2.4 143 1.0 95 4.4 143 1.8 139 Mauritania 2.3 139 1.2 109 3.8 142 2.0 140 Malawi 2.3 111 2.7 139 1.5 131 2.6 141 Burkina Faso 2.2 140 1.2 125 3.1 139 2.2 142 Madagascar 2.1 126 2.2 140 1.3 129 2.8 143 Mali 1.9 138 1.2 135 2.3 136 2.4

Infrastructure Affordability Skills Infrastructure Affordability Skills



Table 4: Usage subindex and pillars

USAGE SUBINDEX


1 Sweden 5.9 2 6.7 3 5.9 20 5.1 2 Singapore 5.9 11 6.2 14 5.3 1 6.2 3 Finland 5.9 5 6.6 4 5.9 17 5.2 4 Japan 5.9 13 6.2 2 6.0 7 5.4 5 Netherlands 5.9 7 6.5 6 5.8 13 5.3 6 Korea, Rep. 5.9 9 6.4 12 5.4 3 5.7 7 Luxembourg 5.8 6 6.5 11 5.4 11 5.4 8 Norway 5.7 3 6.7 10 5.5 24 5.1 9 Denmark 5.7 1 6.8 8 5.7 40 4.6 10 United States 5.7 18 6.0 7 5.7 14 5.3 11 Switzerland 5.6 10 6.4 1 6.1 48 4.4 12 United Kingdom 5.6 4 6.6 16 5.1 16 5.2 13 United Arab Emirates 5.6 20 5.9 27 4.5 2 6.2 14 Germany 5.5 17 6.0 5 5.8 31 4.8 15 Israel 5.5 28 5.6 9 5.7 15 5.2 16 New Zealand 5.4 22 5.9 19 5.0 10 5.4 17 Qatar 5.4 19 6.0 25 4.6 5 5.5 18 Austria 5.3 21 5.9 13 5.4 32 4.7 19 Hong Kong SAR 5.3 12 6.2 18 5.1 36 4.7 20 Australia 5.3 15 6.1 24 4.7 23 5.1 21 Iceland 5.3 8 6.5 21 4.9 42 4.5 22 Taiwan, China 5.3 26 5.7 17 5.1 21 5.1 23 Estonia 5.3 16 6.0 28 4.4 6 5.5 24 France 5.3 24 5.8 20 4.9 18 5.1 25 Bahrain 5.2 14 6.2 49 3.9 4 5.7 26 Canada 5.2 29 5.6 23 4.8 22 5.1 27 Belgium 5.1 25 5.8 15 5.1 43 4.5 28 Ireland 5.1 27 5.7 22 4.8 33 4.7 29 Saudi Arabia 4.9 36 5.3 42 4.0 8 5.4 30 Malaysia 4.9 57 4.6 26 4.6 9 5.4 31 Malta 4.8 23 5.8 37 4.0 38 4.7 32 Lithuania 4.7 37 5.3 31 4.3 35 4.7 33 Spain 4.7 31 5.4 45 3.9 37 4.7 34 Portugal 4.7 46 4.9 33 4.2 26 4.9 35 Oman 4.6 41 5.1 73 3.5 19 5.1 36 Latvia 4.6 30 5.6 41 4.0 51 4.3 37 Chile 4.5 52 4.7 47 3.9 29 4.8 38 Uruguay 4.4 45 5.0 89 3.4 27 4.8 39 Russian Federation 4.4 43 5.1 66 3.6 47 4.4 40 Kazakhstan 4.4 51 4.7 67 3.6 28 4.8 41 Azerbaijan 4.3 59 4.5 58 3.7 34 4.7 42 Slovenia 4.3 34 5.3 36 4.1 84 3.6 43 Barbados 4.3 40 5.2 30 4.3 101 3.5 44 Costa Rica 4.3 56 4.6 39 4.0 54 4.3 45 Czech Republic 4.3 32 5.3 32 4.2 113 3.3 46 Italy 4.2 33 5.3 60 3.7 76 3.7 47 Puerto Rico 4.2 63 4.4 29 4.4 68 3.9 48 Slovak Republic 4.2 35 5.3 55 3.8 88 3.6 49 Hungary 4.2 42 5.1 64 3.7 69 3.9 50 Cyprus 4.2 50 4.7 51 3.9 66 4.0 51 Jordan 4.1 69 4.0 50 3.9 44 4.5 52 Macedonia, FYR 4.1 49 4.8 85 3.5 59 4.1 53 Mauritius 4.1 66 4.1 57 3.8 46 4.4 54 Poland 4.1 44 5.1 71 3.6 86 3.6 55 Montenegro 4.1 60 4.5 83 3.5 52 4.3 56 Croatia 4.1 39 5.2 92 3.4 83 3.6 57 China 4.1 80 3.6 46 3.9 39 4.7 58 Kuwait 4.1 38 5.2 93 3.4 91 3.6 59 Colombia 4.0 77 3.8 81 3.5 30 4.8 60 Brazil 4.0 62 4.4 52 3.8 71 3.9 61 Panama 4.0 72 3.9 40 4.0 57 4.2 62 Turkey 4.0 67 4.0 53 3.8 55 4.2 63 Greece 3.9 48 4.8 96 3.4 82 3.6 64 Morocco 3.9 70 3.9 105 3.3 41 4.6 65 Armenia 3.9 74 3.8 100 3.3 45 4.5 66 Romania 3.9 61 4.5 76 3.5 85 3.6 67 South Africa 3.9 68 4.0 34 4.2 105 3.4 68 Trinidad and Tobago 3.8 58 4.5 86 3.5 96 3.5 69 Sri Lanka 3.8 106 2.6 48 3.9 25 5.0 70 Seychelles 3.8 65 4.2 68 3.6 79 3.7 71 Moldova 3.8 64 4.2 114 3.2 65 4.0 72 Georgia 3.8 76 3.8 104 3.3 50 4.3

USAGE SUBINDEX


73 Bulgaria 3.8 47 4.9 91 3.4 118 3.1 74 Philippines 3.8 89 3.2 38 4.0 61 4.1 75 Thailand 3.7 75 3.8 54 3.8 80 3.7 76 Argentina 3.7 54 4.6 101 3.3 115 3.3 77 Indonesia 3.7 97 3.0 35 4.1 63 4.1 78 Mongolia 3.7 88 3.3 69 3.6 53 4.3 79 Mexico 3.7 87 3.3 72 3.6 56 4.2 80 Serbia 3.7 55 4.6 126 3.0 111 3.3 81 Tunisia 3.6 81 3.5 106 3.3 58 4.2 82 Vietnam 3.6 86 3.3 87 3.5 60 4.1 83 Kenya 3.6 110 2.5 43 3.9 49 4.4 84 El Salvador 3.6 96 3.0 59 3.7 64 4.0 85 Rwanda 3.6 132 1.8 70 3.6 12 5.4 86 Lebanon 3.6 53 4.6 108 3.2 130 2.8 87 Albania 3.5 79 3.6 103 3.3 78 3.7 88 Jamaica 3.5 84 3.4 63 3.7 94 3.5 89 Cape Verde 3.5 82 3.4 97 3.4 77 3.7 90 Egypt 3.5 73 3.9 125 3.1 102 3.5 91 Peru 3.4 94 3.0 90 3.4 70 3.9 92 Botswana 3.4 85 3.3 102 3.3 81 3.7 93 Dominican Republic 3.4 90 3.1 77 3.5 93 3.6 94 Ukraine 3.4 78 3.7 78 3.5 124 2.9 95 Namibia 3.4 95 3.0 61 3.7 97 3.5 96 Ghana 3.4 91 3.1 84 3.5 92 3.6 97 Venezuela 3.3 71 3.9 128 3.0 117 3.1 98 Senegal 3.3 111 2.5 62 3.7 73 3.8 99 Honduras 3.3 103 2.7 56 3.8 106 3.4 100 Gambia, The 3.3 115 2.3 74 3.5 67 4.0 101 Guatemala 3.3 99 2.9 44 3.9 123 2.9 102 Guyana 3.2 107 2.6 82 3.5 89 3.6 103 India 3.2 121 2.0 88 3.5 62 4.1 104 Nigeria 3.2 114 2.4 79 3.5 95 3.5 105 Bhutan 3.1 108 2.6 120 3.1 74 3.8 106 Bolivia 3.1 101 2.7 123 3.1 98 3.5 107 Zambia 3.1 122 2.0 65 3.7 87 3.6 108 Iran, Islamic Rep. 3.1 100 2.9 129 3.0 109 3.4 109 Paraguay 3.1 93 3.1 111 3.2 125 2.9 110 Suriname 3.0 83 3.4 122 3.1 133 2.7 111 Zimbabwe 3.0 104 2.6 112 3.2 112 3.3 112 Mali 3.0 113 2.4 117 3.1 99 3.5 113 Lao PDR 3.0 128 1.9 75 3.5 90 3.6 114 Cambodia 3.0 105 2.6 99 3.4 120 3.1 115 Kyrgyz Republic 3.0 98 2.9 113 3.2 126 2.9 116 Cameroon 3.0 130 1.9 80 3.5 103 3.5 117 Côte d’Ivoire 2.9 119 2.1 95 3.4 114 3.3 118 Pakistan 2.9 123 2.0 94 3.4 110 3.3 119 Gabon 2.9 109 2.5 118 3.1 119 3.1 120 Bangladesh 2.9 129 1.9 124 3.1 75 3.7 121 Tajikistan 2.9 116 2.3 107 3.3 116 3.1 122 Uganda 2.7 135 1.7 110 3.2 107 3.4 123 Swaziland 2.7 118 2.2 109 3.2 127 2.9 124 Tanzania 2.7 137 1.6 121 3.1 100 3.5 125 Burkina Faso 2.7 133 1.8 131 2.9 104 3.5 126 Ethiopia 2.7 140 1.5 135 2.8 72 3.8 127 Mozambique 2.7 136 1.6 116 3.1 108 3.4 128 Nicaragua 2.7 112 2.5 119 3.1 137 2.5 129 Algeria 2.7 102 2.7 137 2.7 134 2.7 130 Madagascar 2.7 138 1.6 98 3.4 122 3.1 131 Nepal 2.6 120 2.1 127 3.0 129 2.8 132 Malawi 2.6 141 1.5 115 3.2 121 3.1 133 Mauritania 2.6 117 2.2 132 2.9 138 2.5 134 Lesotho 2.5 124 2.0 130 3.0 135 2.7 135 Yemen 2.5 127 2.0 133 2.9 132 2.7 136 Libya 2.5 92 3.1 141 2.5 143 1.8 137 Timor-Leste 2.4 125 2.0 138 2.6 131 2.7 138 Angola 2.4 126 2.0 143 2.4 128 2.8 139 Haiti 2.4 131 1.9 134 2.8 140 2.5 140 Guinea 2.3 134 1.7 136 2.8 141 2.5 141 Myanmar 2.2 139 1.6 139 2.6 139 2.5 142 Chad 2.1 142 1.3 142 2.5 136 2.6 143 Burundi 2.1 143 1.3 140 2.5 142 2.4

Individual Business Governent usage usage usage

Individual Business Governent usage usage usage



Table 5: Impact subindex and pillars

IMPACT SUBINDEX


1 Singapore 6.0 4 5.8 1 6.2 2 Netherlands 5.9 5 5.8 3 6.1 3 Finland 5.8 1 6.1 12 5.6 4 Sweden 5.7 2 6.0 16 5.5 5 Korea, Rep. 5.6 10 5.2 4 6.0 6 United States 5.6 7 5.6 11 5.6 7 Israel 5.5 6 5.7 19 5.4 8 Switzerland 5.5 3 5.9 34 5.0 9 United Kingdom 5.5 13 5.1 6 5.8 10 Norway 5.4 11 5.2 7 5.7 11 Japan 5.4 12 5.1 13 5.6 12 Luxembourg 5.3 8 5.3 20 5.4 13 Canada 5.3 14 5.1 9 5.6 14 Estonia 5.3 25 4.6 5 6.0 15 Taiwan, China 5.3 17 4.9 8 5.7 16 Hong Kong SAR 5.2 16 5.0 18 5.4 17 Germany 5.2 9 5.3 31 5.1 18 United Arab Emirates 5.2 27 4.3 2 6.1 19 Australia 5.1 24 4.6 14 5.6 20 New Zealand 5.0 26 4.5 15 5.5 21 Denmark 5.0 18 4.9 30 5.1 22 Iceland 5.0 21 4.7 24 5.3 23 France 5.0 22 4.7 25 5.3 24 Ireland 5.0 15 5.0 38 4.9 25 Belgium 4.9 20 4.8 29 5.1 26 Austria 4.9 23 4.7 26 5.2 27 Qatar 4.8 32 4.0 10 5.6 28 Portugal 4.7 30 4.0 22 5.4 29 Lithuania 4.7 28 4.2 27 5.2 30 Malaysia 4.6 31 4.0 28 5.2 31 Malta 4.5 33 4.0 33 5.0 32 Latvia 4.5 35 3.9 32 5.1 33 Bahrain 4.5 48 3.5 17 5.5 34 Spain 4.5 34 4.0 36 4.9 35 Chile 4.4 44 3.5 23 5.3 36 Uruguay 4.4 56 3.4 21 5.4 37 Barbados 4.3 19 4.9 86 3.7 38 Saudi Arabia 4.3 41 3.7 37 4.9 39 Slovenia 4.3 29 4.0 53 4.5 40 Puerto Rico 4.2 37 3.8 51 4.5 41 Costa Rica 4.1 47 3.5 41 4.8 42 Russian Federation 4.1 39 3.7 48 4.6 43 Jordan 4.1 42 3.6 44 4.6 44 Kazakhstan 4.1 52 3.5 42 4.8 45 Oman 4.1 62 3.3 35 4.9 46 Panama 4.1 45 3.5 46 4.6 47 China 4.0 71 3.2 40 4.9 48 Azerbaijan 4.0 49 3.5 49 4.5 49 Hungary 4.0 38 3.8 63 4.3 50 Cyprus 4.0 43 3.6 59 4.4 51 Kenya 4.0 59 3.4 52 4.5 52 Colombia 3.9 69 3.2 43 4.7 53 Czech Republic 3.9 36 3.9 74 4.0 54 Armenia 3.9 50 3.5 58 4.4 55 Macedonia, FYR 3.9 53 3.4 55 4.4 56 Rwanda 3.9 98 3.0 39 4.9 57 Montenegro 3.9 46 3.5 61 4.3 58 Slovak Republic 3.9 57 3.4 57 4.4 59 Turkey 3.9 63 3.3 50 4.5 60 Sri Lanka 3.9 75 3.1 47 4.6 61 Mauritius 3.8 65 3.3 56 4.4 62 Philippines 3.8 55 3.4 67 4.2 63 Croatia 3.8 40 3.7 80 3.9 64 Georgia 3.8 97 3.0 45 4.6 65 Mongolia 3.8 83 3.1 54 4.4 66 Italy 3.7 51 3.5 75 4.0 67 Moldova 3.7 79 3.1 60 4.3 68 Greece 3.7 74 3.1 65 4.3 69 Poland 3.7 54 3.4 78 4.0 70 Thailand 3.6 86 3.1 66 4.2 71 Vietnam 3.6 101 2.9 62 4.3 72 Mexico 3.6 72 3.2 76 4.0

IMPACT SUBINDEX


73 India 3.6 92 3.0 68 4.2 74 Indonesia 3.6 78 3.1 72 4.1 75 Brazil 3.6 76 3.1 73 4.0 76 El Salvador 3.6 94 3.0 69 4.2 77 Bulgaria 3.6 61 3.3 84 3.8 78 Senegal 3.6 66 3.3 81 3.8 79 Peru 3.5 96 3.0 70 4.1 80 Romania 3.5 85 3.1 77 4.0 81 Tunisia 3.5 103 2.9 71 4.1 82 Ukraine 3.5 67 3.3 89 3.7 83 Morocco 3.4 120 2.6 64 4.3 84 Egypt 3.4 60 3.3 100 3.5 85 Seychelles 3.4 90 3.0 85 3.8 86 Honduras 3.4 64 3.3 99 3.5 87 Mali 3.4 68 3.2 98 3.5 88 Dominican Republic 3.4 70 3.2 96 3.6 89 Serbia 3.4 80 3.1 90 3.7 90 Cape Verde 3.4 77 3.1 94 3.6 91 Gambia, The 3.4 89 3.0 88 3.7 92 South Africa 3.4 58 3.4 110 3.3 93 Trinidad and Tobago 3.4 84 3.1 92 3.6 94 Argentina 3.3 91 3.0 91 3.7 95 Bhutan 3.3 111 2.7 79 4.0 96 Lao PDR 3.3 88 3.0 95 3.6 97 Guyana 3.3 107 2.8 83 3.8 98 Guatemala 3.2 73 3.2 109 3.3 99 Tajikistan 3.2 93 3.0 103 3.5 100 Bolivia 3.2 108 2.8 93 3.6 101 Jamaica 3.2 82 3.1 106 3.4 102 Kuwait 3.2 119 2.7 87 3.7 103 Albania 3.2 125 2.5 82 3.8 104 Nigeria 3.1 81 3.1 116 3.2 105 Pakistan 3.1 102 2.9 108 3.4 106 Bangladesh 3.1 106 2.8 105 3.4 107 Côte d’Ivoire 3.1 99 3.0 114 3.3 108 Venezuela 3.1 116 2.7 97 3.5 109 Namibia 3.1 105 2.8 107 3.4 110 Cameroon 3.1 87 3.0 118 3.1 111 Botswana 3.1 113 2.7 101 3.5 112 Zambia 3.1 109 2.7 104 3.4 113 Ghana 3.0 121 2.6 102 3.5 114 Kyrgyz Republic 3.0 114 2.7 112 3.3 115 Paraguay 3.0 95 3.0 124 3.0 116 Iran, Islamic Rep. 3.0 110 2.7 115 3.2 117 Lebanon 2.9 104 2.9 125 2.9 118 Cambodia 2.9 112 2.7 123 3.1 119 Mozambique 2.9 117 2.7 120 3.1 120 Zimbabwe 2.9 128 2.5 113 3.3 121 Burkina Faso 2.9 100 2.9 131 2.8 122 Tanzania 2.9 132 2.4 111 3.3 123 Uganda 2.8 122 2.5 122 3.1 124 Madagascar 2.8 129 2.5 121 3.1 125 Malawi 2.8 115 2.7 127 2.8 126 Swaziland 2.7 123 2.5 126 2.9 127 Nepal 2.7 137 2.3 119 3.1 128 Ethiopia 2.7 139 2.2 117 3.2 129 Suriname 2.6 118 2.7 133 2.6 130 Gabon 2.6 130 2.5 129 2.8 131 Nicaragua 2.6 126 2.5 132 2.7 132 Timor-Leste 2.6 131 2.4 130 2.8 133 Lesotho 2.5 138 2.2 128 2.8 134 Algeria 2.5 127 2.5 136 2.6 135 Haiti 2.4 135 2.3 134 2.6 136 Angola 2.4 134 2.3 135 2.6 137 Mauritania 2.4 124 2.5 139 2.3 138 Yemen 2.4 133 2.3 137 2.5 139 Myanmar 2.4 136 2.3 138 2.4 140 Chad 2.1 140 2.1 140 2.2 141 Burundi 2.1 141 2.1 142 2.2 142 Guinea 2.1 142 2.0 141 2.2 143 Libya 1.8 143 1.8 143 1.7

Economic Social impacts impacts

Economic Social impacts impacts



otherwise features six upper-middle-income countries, the highest-ranked being Malaysia at 32nd place. At the bottom of the rankings, 26 of the 30 worst-performing countries are low-income or lower-middle-income countries. The only exceptions are Algeria (120th), Gabon (122nd), Libya (131st), and Angola (140th). These oil-rich countries belong to the upper-middle-income category, and they all face major challenges across all components of the Index.

The composition of the top 10 would seem to suggest that “smaller” nations are at an advantage when it comes to networked readiness: seven of the 10 best performers have a population of less than 20 million. Yet, when considering the full sample of economies, Figure 3 reveals that this relationship does not hold and that size is not a key determinant of networked readiness.

Singapore tops the rankings this year, and even though Finland drops to 2nd place, seven of the top 10 economies this year are European. That is one more than in 2014, thanks to Luxembourg (9th), which—along with Japan—enters the top 10 at the expense of the Republic of Korea (12th, down two spots) and Hong Kong SAR (14th, down six). As a result, Singapore is now the only representative of the Asian Tigers in the top 10. Taiwan (China) (18th, down four) also loses significant ground.8 Meanwhile, Japan (10th, up six) continues its progression and enters the top 10. Besides Singapore and Japan, the United States (stable at 7th) is the only other non-European country in the top 10.

In Europe, Northern and Western Europe are home to some of the best connected and most innovation-driven economies in the world. In particular, the Nordics—Finland (2nd), Sweden (3rd), Norway (5th), Denmark (15th), and Iceland (19th)—continue to perform well in the NRI. Indeed, these five countries have featured in the top 20 of every edition since 2012.

The group performance of Western European countries is also strong. The Netherlands (4th), Switzerland (6th), the United Kingdom (8th), and Luxembourg (9th) all appear in the top 10. Ireland (25th) has been stable since 2012, and France (26th)—which has lost three places since 2012—closes the group in the subregion. In Southern Europe, Portugal (28th, up five), Italy (55th, up three), and Greece (66th, up eight) improve significantly from last year on the back of major improvements in government usage, whereas Malta (29th, down one), Spain (34th), and Cyprus (36th, up one) remain quite stable. These largely positive trends contribute to narrowing Southern Europe’s gap with the rest of the region, which had been widening since 2012.

Farther east, thanks to the strong performance of Estonia (22nd) and the steady rise of Latvia (33rd, up six), which is catching up with Lithuania (31st), the Baltic countries are slowly but surely bridging the gap with the Nordics—a remarkable achievement for the three former Soviet Republics. While Estonia has always been in the vanguard, Lithuania and Latvia are breaking away from

what was once a fairly homogenous group of Eastern European countries that have joined the European Union (EU) since 2004: Slovenia (37th, down one), the Czech Republic (43rd, down one), Hungary (53rd, down six), Croatia (54th, down eight), and the Slovak Republic (59th, no change) are either stable or losing ground. Meanwhile, Poland has jumped four places to enter the top 50, and Romania—once the worst performer in the European Union—has leapfrogged 12 positions to reach 63rd place, ahead of Bulgaria (73rd, no change).

The divide within the Middle East, North Africa, and Pakistan (MENAP) is the largest among all regions. The United Arab Emirates (UAE; 23rd, up one) and Qatar (27th, down four) continue to lead, ahead of Bahrain (30th), Saudi Arabia (35th), and Oman (42nd), which are all members of the Gulf Cooperation Council (GCC). All owe their success to a very strong commitment to ICT development by their respective governments. Kuwait’s performance (72nd) stands at odds with that of its GCC peers. In the rest of the region, only Jordan (52nd) features in the top half of the rankings. Morocco follows at a middling 78th, but it is the country that has improved the most (21 places) over the past year. Mauritania (138th) remains the region’s worst-performing country, 115 places behind the UAE.

Emerging and developing Asia also presents contrasting pictures. Over 100 places separate the region’s best- and worst-performing economies. Second, with only Malaysia (32nd) featured in the top 60, two-thirds of the countries from the region appear in the bottom half of the rankings; Mongolia (61st), Sri Lanka (65th), and Thailand (67th) all lag some 30 places behind. China is stable in 62nd position, while India continues its decline, dropping a further six to 89th place, both contributing to the disappointing group performance of the BRICS.

Chile (38th, down three) leads in Latin America and the Caribbean, almost 100 places ahead of Haiti (137th), the region’s worst performer. Overall, though, trends in

1 10 100 1,0001

2

3

4

5

6

7R 2 = 0.03

Figure 3: Networked readiness and population size


NRI 2

015

scor

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Population, millions (log scale)



are similar, because a well-developed infrastructure is a pre-condition to ICT adoption. In addition, although ICTs are becoming increasingly affordable in many developing countries, most sub-Saharan Africa countries lag behind. The difficulty faced by this region in mastering the infrastructure-affordability-usage nexus is particularly worrisome.

Finally, looking at the trends since 2012 reveals that all regions have improved their overall performance to some extent (see Figure 5).9 With an average NRI score up 0.5 points since 2012, the Commonwealth of Independent States (CIS) has seen the most progress as a whole. Five of the 10 countries that have improved their NRI score the most are from the CIS, including Armenia and Georgia (see Table 6). Emerging and developing Europe improves by 0.2 points, as does Latin America and the Caribbean. The other regions posts small gains of about 0.1 points, with the exception of sub-Saharan Africa, whose performance has remained stable since 2012.

Key findingsAmong the many insights that emerge from the NRI results, five key findings stand out because of their important policy implications: (1) the persistence of digital divides, (2) the need for an Internet revolution, (3) the policymakers’ low-hanging fruit to boost ICT use, (4) ICTs’ contributions to shared prosperity, and (5) a call for better data.

the region are encouraging: 14 of the 23 countries in the region have increased their score since last year; 19 of them have done so since 2012. In particular, Costa Rica (49th, up nine since 2012), Panama (51st, up six), El Salvador (80th, up 23), Peru (90th, up 16), and Bolivia (111th, up 16) have posted some of the largest score gains since 2012.

The performance of sub-Saharan Africa is particularly poor: 30 of the 31 countries included in the sample appear in the bottom half of the NRI rankings. The only exception is Mauritius, at 45th. The country has progressed three places since last year and eight since 2012. Among the large economies of the region, Nigeria drops seven places to 119th. South Africa drops five to 75th—it is now third in the region behind Mauritius and Seychelles (74th). In contrast, Kenya (86th, up six) has been slowly improving since 2012.

When considering the results of the different pillars of the NRI, the relationship with income is very strong for eight of the ten pillars, the two exceptions being the Affordability and the Government usage pillars. Advanced economies outperform the rest of the world in every pillar (see Figure 4) except Affordability. Sub-Saharan Africa is the worst-performing region in all pillars except for the Political and regulatory environment, in which Latin America and the Caribbean obtains the lowest average score.

The divide among the best- and worst-performing countries runs the deepest in terms of Infrastructure, Affordability, and Individual usage. Not unexpectedly, the results in the Infrastructure and Individual usage pillars

1

2

3

4

5

6

7

Best

Worst

Advanced economies

Latin America and the Caribbean

Sub-Saharan Africa

Emerging and developing Europe

Emerging and developing Asia

Commonwealth of Independent States

Middle East, North Africa, and Pakistan

FinlandSingapore

SwitzerlandDenmark

Finland

Chad

India

Madagascar

NorwayTaiwan (China)

Chad

Singapore

Chad

New Zealand

Venezuela

Singapore

LibyaLibya

Angola

Burundi Libya

10th pillar: Social impacts

9th pillar: Economic impacts

8th pillar: Government

usage

7th pillar: Business

usage

6th pillar: Individual

usage

5th pillar: Skills

4th pillar: Affordability

3rd pillar: Infrastructure

2nd pillar: Business

and innovation

environment

1st pillar: Political

and regulatory

environment

Figure 4: Best and worst performers and regional performance by NRI pillarScore

Note: The light blue boxes identify the interquartile range—from the 75th to the 25th percentile—for each distribution.



The limits of the mobile revolution and the persistence of digital dividesIn the span of just two decades, the number of mobile telephone subscriptions exploded from essentially zero to 6.9 billion.10 The mobile revolution originated in the rich world, and by the year 2000, high-income OECD countries already boasted 50 subscriptions per 100 population. In low-income countries, however, the rate was still less than 1 subscription per 100 population (see Figure 6).11 Thanks to fast-paced growth, the developing world started to bridge this “mobile divide.” Whereas high-income countries still boasted 18 times more subscriptions per 100 population than low-income countries in 2005, this ratio had dropped to 2 times by 2013.

Arguably, the mobile revolution’s influence has been greatest in the developing world, where it has helped address the critical lack of telecommunication infrastructure and improve access and productivity in sectors such as agriculture, health, education, and finance. While this is truly remarkable, one must acknowledge the limits of this mobile revolution.

First, even though there are almost as many mobile telephone subscriptions as people on the planet, this does not imply that everyone owns or is using a mobile phone. The number of mobile subscriptions far exceeds the number of mobile phone users.12 Based on the GSM Association’s estimates that unique mobile subscribers account for about half of mobile cellular subscriptions, ITU reckons that mobile telephony penetration has reached approximately 48 percent globally and 30 percent in least-developed countries.

Second, even in countries where penetration rates exceed 50 percent, vast disparities exist between urban and rural areas. Indeed, parts of the developing world are not yet covered by a mobile network signal. ITU calculates that, at the end of 2012, around 450 million people worldwide still lived out of reach of a mobile signal.13

Third, only so much can be done through 2G mobile telephony, which can carry only voice and text messages. The most compelling and promising solutions for development require more sophisticated technologies: first and foremost is fast and reliable access to the Internet, be it mobile, wireless, or wired access. But the Internet is neither as ubiquitous nor is it spreading as fast as many believe. Beyond mobile telephony, the digital divide still runs deep.

Figure 7 reveals the stubbornly high correlation between income and performance in the ICT usage pillar. In this category, the score gap between high-income economies and the rest of the world is large and has actually been widening since 2012: lower-middle-income and low-income countries are now farther behind than they were in 2012 (see Figure 9). Figure 8 shows that the relationship between income and ICT

ADV

CIS

EDA

EDE

LAC

MENAP

SSA

3.0

3.5

4.0

4.5

5.0

5.5

2012 2013 2014 2015

Figure 5: Regional trendsRegion’s average NRI score, 1–7

Sources: World Economic Forum; World Bank 2015.Note: ADV = Advanced economies; CIS = Commonwealth of Independent States;

EDA = Emerging and developing Asia; EDE = Emerging and developing Europe; LAC = Latin America and the Caribbean; MENAP = Middle East, North Africa and Pakistan; SSA = Sub-Saharan Africa.

Table 6: Ten most improved countries since 2012In order of score differences

NRI 2012 NRI 2015

CountryRank

(Out of 142)Score (1–7)

Rank (Out of 143)

Score (1–7)

Score difference

Armenia 94 3.49 58 4.25 0.76

Georgia 88 3.60 60 4.23 0.63

United Arab Emirates 30 4.77 23 5.30 0.54

Kazakhstan 55 4.03 40 4.54 0.52

Russian Federation 56 4.02 41 4.53 0.51

El Salvador 103 3.38 80 3.89 0.51

Macedonia, FYR 66 3.91 47 4.42 0.51

Mauritius 53 4.06 45 4.49 0.42

Kyrgyz Republic 115 3.13 98 3.54 0.41

Latvia 41 4.35 33 4.75 0.40

High (OECD)High (non-OECD)Upper middle Lower middle Low income

1997 200320011999 20072005 20092011 20130

30

60

90

120

150

180

Figure 6: Bridging the mobile telephony divideMobile telephone subscriptions per 100 population, by income group

Source: Authors’ calculations, based on ITU 2015 and World Bank 2015.Note: Population-weighted rates. See text for details.



In 2013, among the 25 low-income countries studied, five had a penetration rate above 10 percent and only one—Kenya—had a rate exceeding 20 percent. Kenya liberalized its telecommunications sector in the late 1990s and created the Kenya Internet Exchange Point in 2002, which led to a dramatic fall in providers’ operating costs and retail prices and an increase in local content.17 As a result, Internet penetration in Kenya increased from 1 percent in 2002 to 39 percent today—five times the low-income group’s average.

As in the case of mobile telephony, the rural-urban gap in terms of Internet penetration is large. According to ITU, it is even widening in parts of the world.18 Data are extremely scant, but the few data points that do exist are telling. In Guatemala, for instance, an urban household is 12 times more likely to be connected to the Internet than a rural one. And ITU reckons that this ratio could be much higher in low-income countries.

The difference in the speed of Internet adoption across countries is striking, too (see Table 7). It took only six years on average for high-income OECD countries

impacts is almost as strong, providing an illustration of the new digital divide as we termed it in 2013.14

The need for an Internet revolutionThe United Nations’ Open Working Group (OWG) on Sustainable Development Goals recommends that the international community “... strive to provide universal and affordable access to internet in least-developed economies by 2020.”15 In light of the current levels and growth trends described below, this milestone appears highly optimistic and will most likely be missed.

Indeed, the Internet remains nonexistent, scarce, unaffordable, or too slow in vast swaths of the developing world. Figure 10 shows the Internet penetration rate by income group and by year since 1997, when data coverage became sufficiently large.16 At the end of 2013, 81 percent of the population of high-income OECD countries used the Internet. The rate among low-income countries was 10 times less—a mere 7.6 percent, which is lower than the penetration rate among OECD countries was in 1997.

Impa

ct s

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100 1,000 10,000 100,0001

2

3

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7R 2 = 0.65

Figure 8: New digital divide



20132012 2014 2015

Lower-middle

Low

Upper-middle

High(non-OECD)

2.5

2.0

1.5

1.0

0.5

0.0

Figure 9: Evolution of the digital divideIndividual usage pillar: Score differentials with high-income OECD average (inverted scale)

Note: Constant sample of 131 economies.

100 1,000 10,000 100,0001

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7

R 2 = 0.86

Figure 7: Conventional digital divide


Indi

vidu

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core


High (OECD)High (non-OECD)Upper middle Lower middle Low

1997 200320011999 20072005 20092011 20130

20

40

60

80

100

Figure 10: Internet penetrationPercent of individuals using the Internet, by income group

Source: Authors’ calculations based on ITU 2015 and World Bank 2015.Note: Population-weighted rates. See text for details.



to attain 20 percent penetration.19 In contrast, only half of lower-middle-income countries have reached this mark and it took those almost twice as much time. Furthermore, while 90 percent of high-income countries have exceeded the 60 percent threshold, only 15 percent of upper-middle-income countries—and not a single lower-middle-income or low-income country—have reached this mark yet.

In low-income countries, Internet penetration has been growing at double-digit rates, but from a very low base and growth has been slowing lately (see Figure 11). If penetration continued to grow at the same rate as it did from 2011 to 2013—an optimistic supposition given the trajectory usually assumed by technology diffusion—it will take at least another 12 years for the Internet to reach 75 percent of the world’s population. This is very far from the objective set out by the OWG to achieve universal penetration by 2020.

Finally, beyond affordability and infrastructure, the lack of availability of digital content and services represents another significant obstacle to more widespread adoption. Many individuals do not get online simply because there is little content relevant to them. Chapter 1.3 points to solutions for jumpstarting digital content and services ecosystems.

As developing countries leapfrog to 4G technology, thus enabling owners of smartphones to access the Internet, Internet diffusion may accelerate in coming years. Prices of 4G smartphones remain high, but—thanks to innovation and competition—prices are expected to keep falling. Already one-sixth of smartphones sold in 2013 cost less than US$100.20 Leapfrogging and falling prices could usher in the mobile revolution 2.0, a rapid expansion of mobile broadband throughout the world.

At the same time that prices fall, innovative projects could address the lack and cost of infrastructure that hampers the use of smartphones. For instance, Google’s Loon project plans a network of balloons placed in the stratosphere to broadcast a 4G wireless signal in rural and remote areas. This project, still in a pilot phase, is

not expected to provide a solution in the short term, but it does indicate the role that breakthrough innovations could play in alleviating the obstacle represented by poor or lacking infrastructure.

Yet it would be ill-advised to assume that the Internet will become ubiquitous soon without further policy action. Policymakers must accelerate liberalization, boost public investment, and work closely with international and domestic businesses to attract private investment and encourage innovation. In this effort, connecting rural areas of developing countries to broadband networks must be a priority. Since those areas lack other infrastructure and access to public services, the benefits brought about by ICTs will have especially momentous impact. Improving the framework conditions and the readiness of the population will also increase the potential of this impact.

Policymakers’ low-hanging fruit to boost ICT useTo achieve this Internet revolution and bridge the digital divides, countries need to build their ICT readiness. This

Table 7: Speed of diffusion of mobile telephony and the Internet by income groupMedian time (years) to reach selected thresholds

Mobile telephone subscriptions per 100 inhabitants (threshold) Individuals using the Internet (%) (threshold)

40 80 120 20 40 60

Share (%)* Time (yrs)† Share (%)* Time (yrs)† Share (%)* Time (yrs)† Share (%)* Time (yrs)† Share (%)* Time (yrs)† Share (%)* Time (yrs)†

High income: OECD 100 7.0 100 10.5 56 17.0 100 6.0 100 9.0 94 12.0

High income: non-OECD 100 9.0 97 12.0 65 15.0 97 7.0 97 11.5 87 15.0

Upper-middle income 98 7.0 92 11.0 45 13.0 88 10.0 63 13.5 15 14.0

Lower-middle income 93 8.0 59 10.5 25 11.0 51 11.0 19 13.0 0 —

Low income 72 8.0 19 10.0 6 11.0 4 10.0 0 — 0 —

Source: Authors’ calculations based on ITU 2015.Note: See text for details.* Share of economies in that income group having reached this threshold; † Median number of years it took to reach this threshold.

2003

2007

2005

2011

2009

2013

2000

2001

2004

2008

2006

2012

2010

2002

0

20

40

60

80

100

Figure 11: Internet penetration in low-income economiesGrowth, 3-year moving average, %

Source: Authors’ calculations based on ITU 2015.Note: Based on population-weighted penetration rates. See text for details.



terms of liberalization than Emerging and developing Asia or the MENAP regions. Many sub-Saharan African countries have fully liberalized their ICT markets, including several Least Developed Countries (LDCs) and fragile economies: Burkina Faso, Cape Verde, Kenya, Lesotho, Madagascar, Mauritius, Nigeria, Tanzania, and Uganda. This strategy bodes well for the future, and some countries—such as Kenya and Tanzania—are already reaping the benefits of this liberalization in the form of increased investments and use and the introduction of new business models and services.

A byproduct of market liberalization is the creation of Internet exchange points (IXPs). IXPs are physical infrastructures for the exchange of traffic between Internet service providers (ISPs) and other content providers. As countries develop their digital infrastructure, IXPs are used to route domestic traffic exclusively within the country without needing to exchange data through international carriers. This significantly improves the network performance in terms of latency and stability, and it also decreases costs for domestic ISPs.

IXPs can be established with the direct support of the government (as in Nigeria) or by a group of private ISPs (as in Kenya). In both cases, governments provide an essential element, either by playing an active, leadership role in spurring the adoption of this type of technology, or by creating an enabling, competitive environment and properly regulating the existence and provision of this type of services. Governments also play a strategic role in developing IXPs through the construction of Internet backbone networks to connect IXPs to potential users both domestically and abroad.21

ICTs’ contributions to shared prosperityIf harnessed properly, ICTs can create economic opportunities and foster social and political inclusion, ultimately contributing to shared prosperity. The socioeconomic benefits brought about by ICTs are precisely what the Impact subindex of the NRI aims to measure.

ICTs hold the potential for transforming our economies through multiple channels. They boost productivity and reduce transaction and information costs. They allow new models of collaboration that increase workers’ efficiency and flexibility for better work-life balance.

ICTs foster entrepreneurship and create new business models. The past two decades have witnessed the emergence of startups that have disrupted entire industries or created entirely new ones. Some of these startups have since become corporate giants that are transforming our world. Startup incubators now exist in most major cities and provide affordable training, mentorship, and resources to those who wish to start a business. Associated with 3D printing and other

implies long-term, costly investments in infrastructure and in education. But a low-hanging fruit exists in the policymaker toolkit. Governments can accelerate the process through sound regulation and more intense competition. By displaying leadership, they can create an enabling environment and orient private operators toward the best solutions for the system’s long-term cost-effectiveness, quality, and sustainability.

Of course, liberalization bears political costs because it implies breaking the dominant position of well-connected or government-owned firms. However, countries can and must overcome these costs to reap the benefits, which are significant. Liberalization attracts more players and creates competition, which in turn tends to increase the quality of products and services and reduce retail prices. This better system lures more customers and encourages investment, both domestic and foreign, which is used to improve infrastructure and the availability of services. Larger markets also generate economies of scale for operators, thus reducing retail prices further and attracting even more customers. In short, liberalization creates a virtuous circle with lasting and far-reaching effects across the economy.

Figure 12 shows the state of liberalization in 17 categories of ICT services on a scale from 0 (monopoly in all services) to 2 (all services fully liberalized). The blue bars delineate the interquartile range within each region, while the black squares and the blue dots identify the median value and outliers, respectively. Although advanced economies perform better on average than any other group of economies, countries from all regions and at different development stages have liberalized their ICT markets

The performance of sub-Saharan Africa is noteworthy: on average, the region performs better in

0.0

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2.0

MENAPEDASSACISLACEDEADV

Myanmar Libya

Sri Lanka

Ethiopia

SwazilandTajikistan

Uruguay

Bolivia

Guyana

Suriname

Albania

Bulgaria

Italy

New Zealand

Cyprus

MauritaniaMoroccoPakistan

Lebanon

Yemen

Kuwait

Figure 12: ICT services competitionNRI indicator 4.03: Internet and telephony competition, 0–2 (best)

Notes: The light blue boxes and the black marks identify, respectively, the interquartile range (from the 75th to the 25th percentile) and the median value for each of the distributions. ADV = Advanced economies; CIS = Commonwealth of Independent States; EDA = Emerging and developing Asia; EDE = Emerging and developing Europe; LAC = Latin America and the Caribbean; MENAP = Middle East, North Africa and Pakistan; SSA = Sub-Saharan Africa



technologies, user-friendly, open-source software and inexpensive hardware are contributing to the spread of digital manufacturing among aspiring entrepreneurs, especially among the youth (see Box 2).

Through crowdfunding and equity-crowdfunding platforms, ICTs also provide alternative sources of credit for individuals and entrepreneurs who do not have access to traditional sources of funding, or even for more established businesses that need to finance their operations. Online marketplaces, such as Lending Club,

allow borrowers and lenders to connect directly online, while big data makes it possible to compute a credit score for virtually every human being.

ICTs offer significant social benefits, notably by enabling access to basic services, including financial services and education. Perhaps one of the best examples of how the mobile revolution is changing financial services is M-PESA, the mobile-based money transfer system that was launched in Kenya and Tanzania and is now spreading to the rest of

With the advent of digital manufacturing, “fabrication laboratories” are spreading around the world. These centers provide access to hardware, machines, and open-source software, along with affordable training and mentoring. They encourage collaboration among stakeholders and across disciplines, and are increasingly seen as a powerful way to spur entrepreneurship, address the skills gap, and alleviate youth unemployment while revolutionizing production processes.

In June 2013, the French Ministry for the Economy and Finance (Ministère de l’Économie, de l’Industrie et du Numérique) called for projects to finance 14 new fabrication laboratories. In doing so, the government recognized the key role of such structures in spreading a culture of innovation and creating bridges between civil society, the private sector, and the education system. The projects were presented by firms, universities, and private associations. All of these projects were based on partnerships among different stakeholders. Moreover, in the context of the Initiative French Tech—a program launched by the French government to support the creation of startups—the presence of a fabrication lab is one of the requirements for a city (or any

geographic entity) to be officially recognized as a “Métropole French Tech.”1

In Italy, the North East Foundation (Fondazione Nord Est), a public-private foundation partnered by local business associations and public institutions, is leading an effort to create a fabrication lab in every high school of the northeast of the country. An online crowdfunding platform was launched in January 2015 to finance labs in 10 schools and a professional training center.2 Within the current context of reforming the school system, in 2015 the Italian government also plans to launch introductory courses on digital manufacturing in some secondary schools, teaching pupils how to code and use digital technologies to make objects on their own or connecting existing ones to the Internet.3

The largest network of labs is one supported by the Fab Foundation, born as an educational outreach component of MIT’s Center for Bits and Atoms. Today, this community is composed of 472 “Fab Labs” in 71 countries (see Figure A).4 It engages schools, academia, entrepreneurs, and research institutions. To be certified as a Fab Lab by the Fab Foundation, a fabrication laboratory must provide a common set of tools and services and share the objectives and the principles of the “Fab Charter.”

Box 2: Fab Labs and digital makers: How information technology is fostering youth entrepreneurship

Notes

1 http://www.labuonascuola.gov.it.

2 http://www.fablabs.io (accessed on February 20th, 2015).

3 http://www.lafrenchtech.com.

4 http://www.fablabascuola.it.

1 2 3 4 5 6 70.0

0.5

1.0

1.5

2.0R 2 = 0.25

Figure A: Individual usage: ICTs and Fab Labs Table A: Fab Labs per million people (top 10 countries)

Sources: The Fab Foundation (www.fablabs.io, accessed February 20, 2015); World Economic Forum.

Notes: N = 142 economies. Iceland has been excluded from the graph and calculation because it represents an outlier in terms of the number of Fab Labs per million people.

# Fa

b La

bs/m

illio

n po

p.

Individual usage (pillar 6)

Country/Economy Fab LabsFab Labs (per million pop.)

Youth unemployment (2013), %

1 Iceland 5 15.5 11.1

2 Suriname 1 1.9 22.5

3 Luxembourg 1 1.8 19.2

4 Netherlands 26 1.5 11.0

5 Bahrain 2 1.5 27.9

6 Switzerland 11 1.4 8.8

7 Denmark 6 1.1 13.0

8 Latvia 2 1.0 20.3

9 Italy 52 0.9 39.7

10 France 54 0.8 23.7

Source: The Fab Foundation (www.fablabs.io, accessed on February 20th 2015); World Bank 2015.

Note: Outlier Iceland, included here, shows far more Fab Labs per million population than any other country.



the developing world. In the education arena, the proliferation of massive online open courses (MOOCS) allows people around the world to upgrade their skills, train, or re-train more frequently, more flexibly, and more cheaply than through traditional channels.

Technology is also allowing for a more direct interaction between populations and governments. Improved government online presence can significantly increase the efficiency of public administration. The Internet provides new ways for citizens to participate in the policy- and decision-making processes, especially for those whose voice is usually further from the boardrooms. Open-data initiatives and stronger commitments by governments to making information available online improve transparency, governance, and accountability, because citizens and civil society can now monitor more closely the conduct of civil servants.

Most governments have responded—more or less promptly—to demand for e-participation and have enhanced the provision of e-information, the launch of e-consultation initiatives, and the use of e-decision-making. As a result, we observe significant improvement by most countries in the latest edition of the E-participation Index (indicator 10.04) compiled by UNPAN.

Widespread ICT use by businesses, government, and the population at large is a pre-condition for all these benefits and opportunities to materialize, as confirmed by the NRI results. Figure 13 reveals the nearly perfect relationship between the Usage and Impact subindexes—a linear regression of the latter on the former yields a coefficient of determination (R2) of 0.94.

Better data for better policiesThe lack of good data on some of the most basic indicators of socioeconomic performances, let alone ICT-related concepts, is truly alarming, as it can lead to misguided policies and misallocation of resources. In August 2014, UN Secretary-General Ban Ki-moon appointed an Independent Expert Advisory Group (IEAG)

on a Data Revolution for Sustainable Development. In its report Mobilising for the Data Revolution, the IEAG referred to data as “the lifeblood of decision-making and the raw material for accountability.”22

To a certain extent, the NRI also suffers from data paucity. Like any benchmarking exercise, it is only as good as its underlying data. The World Economic Forum is fully aware of the limitations of the data and acknowledges the gaps, particularly when it comes to measuring the impacts of ICTs. A handful of data points composing the NRI pre-date 2006, a lag of 10 years, which by ICT standards is appallingly long.

Echoing the UN Secretary-General, the plea for more and better data is reiterated. Governments around the world need to strengthen the capacity of national statistical offices to collect data and preserve their independence, and to support the United Nations’ agencies and other international institutions in their hugely important efforts to collect more reliable, more granular, more timely, more complete, and more harmonized data.

ICTs will both contribute to ushering in the data revolution and benefit from it. ICTs—in all their forms, such as mobile phones, the Internet of things, satellite imagery, and sensors—are revolutionizing the way data are being collected. The new data thus collected will in turn further our understanding of how ICTs are impacting our society.

COUNTRY HIGHLIGHTSIn this section the performance of selected countries is briefly described. We look at the 10 best-performing countries in the NRI 2015 and the members of the G-20 that do not belong to the top 10 (Table 8). The Country/Economy Profiles section of this Report is a useful complement to the reading.

A runner-up behind Sweden in 2012 and behind Finland in the past two editions, Singapore overtakes the latter to earn the NRI’s top spot this year. The city-state’s performance is one of the most consistent across the 10 categories of the Index: it tops three pillars (Business and innovation environment, Government usage, and Social impacts), features in the top 3 of another two, and ranks no lower than 30th (in the Affordability pillar) in the remaining five. The government is leading the ICT revolution with a clear digital strategy and one of the world’s best offerings in terms of online services and e-participation tools. It notably ranks 2nd, behind only the United Arab Emirates, in the indicator measuring the impact ICTs are having on government efficiency. Singapore offers the most conducive business and innovation environment worldwide and ranks 2nd for the quality of its regulatory framework. ICT readiness is outstanding thanks to Singapore’s highly skilled workforce (2nd, behind Finland) and infrastructure (19th). With such fertile ground, it is not surprising that ICTs are so widespread: Singapore boasts the highest penetration

1 2 3 4 5 6 71

2

3

4

5

6

7R 2 = 0.94

Figure 13: Usage and impact


Impa

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ubin

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e

Usage subindex score



of mobile broadband subscriptions per capita in the world. Yet Internet uptake is surprisingly low: only three-quarters of the population use it on a regular basis—20 percentage points lower than leaders Iceland, Norway, and Sweden. This relatively low uptake does not prevent Singapore from generating substantial economic and social impacts through ICTs, however: it comes in 1st in the Impact subindex. In particular, some 53 percent of the population is employed in knowledge-intensive jobs, the second highest ratio after Luxembourg.

After two years at the top of the NRI rankings, Finland slips to 2nd place but remains a top performer in many aspects of networked readiness. The country boasts an excellent political and business environment and top-level infrastructure (5th). Finland ranks 1st in the Skills pillar: its education system is outstanding and its workforce highly skilled. This, coupled with affordable ICT access (9th) allows widespread use among the population (5th) and businesses (4th). Although it has not yet found ways to fully restructure its large ICT industry, Finland overtakes Japan as the country with the highest number of ICT PCT patents per capita. The government is also re-thinking a way to promote the ICT industry. In 2013, the ICT 2015 Working Group published its final report recommending new financing programs for startups and growing companies, a 10-year research and development program, and better and more systematic use of ICTs within public administration. These efforts are expected to stem the deterioration of Finland’s performance in government online service delivery (18th, down from 7th) and citizens’ e-participation (24th, down from 11th).

Contributing to the strong performance of the Nordics, Sweden maintains its 3rd position for the third edition in a row. The country presents a strong performance across the board. Its political and business environment remains one of the best in the world (13th) despite a slight decline. Sweden’s readiness is outstanding (4th) with excellent infrastructure (3rd), affordable ICT access (18th, and 3rd in the European Union), and a highly skilled population (28th). ICT usage is widespread among businesses (3rd) and the population at large (2nd). As of 2013, some 95 percent of individuals used the Internet. This allows ICTs to have a large impact on both the economy (2nd) and society (16th). Swedish companies are highly innovative in creating new products and services (6th) and are leaders in patenting ICT-related technology (2nd). Almost half of the Swedish workforce is employed in knowledge-intensive jobs (5th). ICTs also improve access to basic services (8th) and government efficiency (14th), although there is room for improvement in enhancing e-participation in decision-making processes (45th).

The Netherlands retains its 4th place in this edition. The country can rely on one of the soundest political and regulatory frameworks (7th) and one of the most conducive business and innovation environments (8th)

Table 8: Countries covered in this section

NRI rank Page of description

Top 10

Singapore 1 20

Finland 2 21

Sweden 3 21

Netherlands 4 21

Norway 5 21

Switzerland 6 22

United States 7 22

United Kingdom 8 22

Luxembourg 9 22

Japan 10 23

Other G-20 Members

Canada 11 23

Korea, Rep. 12 23

Germany 13 23

Australia 16 23

France 26 24

Saudi Arabia 35 24

Russian Federation 41 24

Turkey 48 24

Italy 55 24

China 62 25

Mexico 69 25

South Africa 75 25

Indonesia 79 25

Brazil 84 25

India 89 26

Argentina 92 26

in the world. Its well-developed infrastructure (14th) and highly skilled workforce (6th) allow for very high levels of ICT uptake. Affordability remains a weak spot (72nd), especially for mobile telephony (101st), with mobile and mobile broadband subscriptions remaining relatively low (69th and 28th, respectively). Individual usage of ICTs is otherwise widespread (7th): almost the entire population has access to a personal computer and a large proportion has access to a fixed broadband connection (3rd highest penetration rate in both indicators). ICTs are also fully leveraged by businesses: the Netherlands has some of the highest levels of business-to-business and business-to-consumer Internet usage (9th and 4th, respectively). The government remains a leader in granting access to government services online (8th) and allowing the population to e-participate (1st). Overall, ICTs have a significant impact on the Dutch economy: companies fully leverage them to create new products and services (5th), and the country has one the highest percentages of workers employed in knowledge-intensive jobs (9th).

Third among the Nordics, Norway retains its 5th position on the back of a remarkable and slightly improving performance: the country ranks in the top 10



of six NRI pillars and no lower than 27th in the other four. It notably boasts one of the best political and regulatory frameworks (6th) and an extremely conducive innovation and business environment (7th). Its infrastructure ranks best in the world (1st). Norwegians are avid users of ICTs (3rd in the Individual usage pillar): 95 percent of the population uses the Internet (2nd only to Iceland) and some 93 percent of households are equipped with a computer (5th). Fixed and mobile broadband access to the Internet is widespread (5th and 13th, respectively). The government has been quite successful in promoting ICTs (18th) and providing online services to companies and citizens (21st). Norway’s economy and society as a whole are positively affected by information technology: businesses are able to adopt new organizational models, thus increasing the adaptability of the work environment (3rd), and employ almost half of their workers in knowledge-intensive jobs (7th); ICTs also contribute to improving access to basic services (6th) and are widely used in the country’s education system to improve learning outcomes (3rd).

Switzerland ranks 6th overall, unchanged from last year despite a small improvement in its score. The country features in the top 10 of seven pillars—a record it shares with Finland and the Netherlands. Excellent institutions (9th), business-friendly regulations (10th), world-class infrastructure (10th), and highly educated labor force (3rd) provide fertile ground for widespread ICT adoption and impact. Switzerland ranks 1st in the business usage pillar of the NRI. Swiss companies—including in flagship industries such as machinery equipment, electronics, pharmaceuticals, watch manufacturing, and banking—are using ICTs to improve production processes, productivity, and quality, and to preserve their innovation edge and maintain their position at the top of the value chain. ICTs are also widespread among the population at large (10th). Notably, Switzerland possesses the highest number of fixed broadband Internet subscriptions per capita in the world. All these factors combine to create a virtuous cycle that makes Switzerland one of the world’s most prolific innovation powerhouses and a true knowledge-based economy. More than 50 percent of its population is employed in knowledge-intensive jobs (3rd, behind Luxembourg and Singapore). In stark contrast with these results, the government does not seem to be adopting ICTs as fervently (48th) as other actors. The mediocre quality of the government online services offering (64th) contributes to this unflattering performance, which places Switzerland in the bottom quarter among advanced economies.

The United States remains in 7th position, with a strong performance in most dimensions of the NRI. It ranks in the top 10 of four pillars, but room for improvement remains in many areas. It ranks a low 53rd in the Affordability pillar, particularly following the increase in the cost of fixed broadband Internet (71st).

The United States must invest in its human capital and improve the general skillset of the population (33rd), especially in the area of math and science (51st). In contrast, ICT-related infrastructure remains among the best in the world (4th). ICT usage is high among all stakeholders: individuals (18th), businesses (7th), and government (14th). This translates into high impacts on both the economy (7th) and society (11th). Across industries and sectors, American companies leverage ICTs to create new businesses and opportunities. The United States remains one the best examples of a large, advanced economy making the right investments to fully leverage ICTs.

The United Kingdom (8th, up one) consolidates its position in the top 10, to which it has belonged since 2012. The country boasts one of the most conducive environments in the world for ICT development (4th). Top-level infrastructure (15th), good affordability (51st, up from 79th last year), and a high degree of preparedness among the population (31st) further contribute to this ecosystem. Individual usage has improved in recent years, and is now one of the most extensive in the world (4th). The United Kingdom displays some of the world’s highest penetration rates of fixed and mobile broadband Internet access (7th and 12th, respectively). UK companies also remain top users of ICTs, showing the way in both business-to-business and business-to-consumer use (3rd and 1st, respectively), and they exhibit an excellent capacity to innovate (10th). ICTs have a significant impact on the UK economy (13th), contributing to the creation of new organizational models, products, and services. Being at the forefront of networked readiness is particularly important for a service-based economy such as the United Kingdom’s, where almost half of the workforce is employed in knowledge-intensive jobs (6th). ICTs also have a large impact on the society at large, notably in terms of e-participation (4th).

Ranked 21st in 2012, Luxembourg continues on its impressive upward trend and enters the top 10 for the first time, at 9th place. The country benefits from a stable and efficient political and regulatory environment (3rd) with a well-developed ICT legislative framework (2nd). Venture capital availability (10th) and low tax rates (13th), among other factors, foster business development and innovation (27th). Luxembourg also possesses excellent infrastructure (18th). ICT usage is widespread among the population, business, and government alike, even though the country comes up short in terms of affordability (50th). A service-based economy, Luxembourg is greatly influenced by information technology. Almost 60 percent of the workforce is employed in knowledge-intensive jobs (1st), and ICTs largely foster the development of new services and products (7th) and new organizational models (17th). In recent years, the government has done a good job of developing a vision for ICTs (5th) and promoting its deployment (4th), helped by the



public-private partnerships formed in the context of the Luxembourg ICT Cluster Initiative. However, there is room to improve government online services (42nd) and to facilitate citizens’ e-participation (54th).

Up eight places since 2012 and six in the past year alone, Japan takes the last spot in the top 10 of the NRI, owing to improvements—sometimes significant—in all pillars. The country now features in the top 10 of three pillars. Notably, Japan ranks 2nd, behind only Switzerland, in the Business usage pillar, thanks to the omnipresence of technology, which contributes to the formidable innovation capacity of Japanese businesses. Japan’s population is among the most avid users of ICTs in the world (13th). Almost nine in ten individuals use the Internet on a regular basis (12th). Nearly every mobile phone in Japan is a smartphone, and the number of mobile broadband subscriptions per capita is the third highest in the world. The government, too, is prompt at adopting ICTs for the benefits of its citizens (7th). Yet ICTs do not have the same disruptive effect on the economy as they do, for instance, in the Nordics, the United States, Israel, or the Republic of Korea. This might be partially the consequence of the hierarchical and patriarchal corporate culture that still prevails in large companies, the society’s relatively high aversion for risk, and an unfavorable regulatory regime, all of which hinder the generation of ideas, initiative-taking, and business creation. As a result, innovation in Japan’s largest companies is mostly incremental rather than disruptive, while the startup community remains largely underdeveloped.

Canada further improves its performance, climbing up six positions to 11th place this year. The country confirms its very strong political and business environment, notwithstanding its judicial system’s relatively slow pace in enforcing contracts (79th). The country also performs well in terms of readiness, with top-level infrastructure (6th) and a highly skilled workforce (9th). Usage remains a relatively weak spot, with mobile broadband penetration (45th) well below that of most advanced economies. Economic and social impacts further increased this year, with a surge of patent applications in ICT industries (13th) and larger overall impact of information technologies on new services and products (21st) and organizational models (12th). Canada also boasts one of the highest percentages of workers employed in knowledge-intensive jobs: 44 percent (ranked 14th worldwide). Finally, ICTs are increasingly used to improve access to basic services (14th) and enhance citizens’ participation in government decision-making (14th).

The performance of the Republic of Korea (12th) is virtually unchanged from last year, and the loss of two places should not be overstated. In fact, the country’s overall ranking has barely budged since 2012. The assessment of Korea’s networked readiness landscape is overwhelmingly positive. The country features in

the top 10 of four pillars. The Korean population is among the most digitally connected (9th), and nearly 98 percent of households are equipped with Internet access (1st). Ultra-fast Internet is ubiquitous in Korea. The transformative effect of ICTs on society is significant (4th), notably thanks to the government’s leadership in adopting ICTs (3rd) and promoting e-participation (1st). In this context, the mediocre performance of Korea in the Political and regulatory environment pillar (42nd) stands out all the more. Another area of relative weakness is the middling quality of the education system (73rd), which is perceived as not fully meeting the needs of Korea’s economy.

Germany slides down one position to 13th but maintains its score. Its performance remains very strong, with an excellent Political and regulatory environment (13th) and top-level Infrastructure (13th). The country also boasts one of the highest levels of ICT uptake among businesses (5th) whose capacity for innovation is outstanding (4th). Usage among the population is widespread, too (17th), and the number of fixed broadband Internet subscriptions per capita is among the world’s highest (9th). In contrast, the uptake of 3G (or above) mobile telephony is surprisingly low (45 per 100 population, 50th)—almost three times less than in countries such as Japan and Finland. Nevertheless, ICTs generate significant economic impacts (9th), with a large share of workers employed in knowledge-intensive jobs (43 percent, 18th worldwide). The country has lost ground in terms of government usage and social impacts (31st), with government online services availability and citizens’ e-participation both decreasing significantly. The renewed government effort in mainstreaming ICTs outlined in the Digital Agenda 2014-2017 bill passed last year, the first-ever in Germany, could reverse the trend. The strategy exposes a number of measures to increase ICT penetration, growth and security, including investment in digital infrastructure, especially in rural areas.

Australia advances two places to reach 16th overall—its best rank so far. Even though it features in the top 10 of only one pillar (Infrastructure), the country ranks no lower than 28th in each of the ten pillars of the NRI. It obtains excellent marks in most of the readiness-related indicators, which translates into very high levels of ICT usage. Australia boasts the 4th highest penetration rate of mobile telephone subscriptions of the third generation or above, although ICT uptake by businesses is more limited (25th). Despite excellent grades in terms of online services offerings and e-participation tools, the government could do more to encourage the use of ICTs. The economy is largely dependent on commodity exports and is not particularly innovative. In order to develop this capacity for innovation, diversify the economy, and build resilience, the government and businesses should embrace ICTs even more enthusiastically.



France drops one spot to 26th, despite improving its score. Its performance is remarkably consistent and strong, but not outstanding: the country ranks between 14th (in the Skills pillar) and 25th in eight of the ten pillars. It places much lower when it comes to the quality of the business and innovation environment (45th). Because of market rigidities and some resistance, France has not yet become an innovation-based economy the way Switzerland, Germany, and the Nordics have, despite widespread use of ICTs and a strong push by the government, which has recently put in place incentives to accelerate this transition. France’s government is one of the most e-ready in the world: the United Nations ranks it 1st for the quality of its online services offerings and 4th in the E-Participation Index, which assesses the availability of online information and participatory tools and services to citizens.

Saudi Arabia (35th, down three spots) drops for the second consecutive edition, but the country remains one of the leaders in the MENAP region, not too far from the other Gulf Cooperation Council members: the UAE (23rd), Qatar (27th), and Bahrain (30th). The drop has been driven mostly by increasing ICT costs (122nd), although recent improvements in Internet and telephony market competition in the country could reverse this trend. Tariffs are particularly high for fixed broadband (124th), helping to explain the low subscription rate (7.4 per 100 people, 74th), which is partly offset by the very high penetration of newer-generation mobile telephony (14th). Business usage has stalled over the last year, leading Saudi Arabia to slide eight positions in this pillar (42nd) while other economies have improved their performance. Similarly, the impact of ICTs on the economy increased in Saudi Arabia, but this increase was less than occurred in other countries, pushing down Saudi Arabia by four notches to arrive at 41st place. The share of knowledge-intensive jobs in the country’s total workforce remains low (27 percent, 54th). ICTs should be leveraged more to accelerate the transition of the economy toward high-value-added activities. The Saudi government shows the way when it comes to promoting and adopting ICTs (8th in the Government usage pillar), earning excellent marks for its online services (18th). However, ICTs have not yet generated significant social impact, a lack that is especially notable in improving the education system (63rd) and facilitating e-participation (51st).

The Russian Federation climbs nine positions to 41st, as a result of an improvement in most of the pillars. The country further improved the skillset of its workforce, moving up 12 positions to achieve 52nd place. In general, ICTs are affordable (15th), even though ICT services have not been fully liberalized yet. Individual uptake is good and rapidly increasing: in the last year, Russia has significantly improved its performance across all dimensions of the Usage subindex (39, up 14). In particular, business usage has improved markedly

but remains limited (66th, up 18). So is the capacity of business to innovate, as reflected in the low number of per capita patent applications (43rd, one of the lowest among high income economies). The country’s capacity to leverage ICTs and its competitiveness in general continue to be seriously undermined by many institutional weaknesses, however. Russia ranks 79th in the Political and regulatory environment pillar of the NRI, owing to the lack of independence (109th) and inefficiency of its judicial system, and to the poor protection of intellectual property (106th), among other issues.

Up three positions, Turkey ranks 48th overall in this edition. The change is largely driven by increased government usage (55th) and social impacts (50th). In recent years, the government has improved its offering of online services (53rd) and facilitated people’s e-participation in decision-making processes (64th), although significant room for improvement remains in both areas. The country performs very strongly in terms of affordability of ICTs (8th), also thanks to competitive and liberalized ICT service markets. However, ICTs have not yet fully entered the life of the population. Turkey ranks 67th in terms of Individual usage, the second-worst performance within the emerging and developing Europe region. For the economy and society to fully leverage the potential of ICTs, Turkey needs particularly to invest in improving the skillset of its population. It places 80th in this category, its worst showing among the 10 pillars of the NRI.

Italy climbs three spots to attain 55th position. The country’s political and regulatory framework remains its weakest spot (102nd), with a very inefficient judicial system (142nd), which requires on average more than a thousand days to enforce a contract (131st). Italy’s innovation environment is also hindered by low venture capital availability (127th), the result of the shortage of private capital for investment. Business lacks the support of public investment in advanced technologies (129th) and is penalized by a very high level of taxation (131st). Italy’s performance in terms of skills (37th) and affordability (36th) is similar to that of other high-income countries. Business usage (60th) is below that of most advanced economies, and only 35 percent of the workforce is employed in knowledge-intensive jobs. The government has made huge improvements in delivering online services (23rd) and allowing citizens’ e-participation (19th). However, it is still unable to adequately promote ICTs (139th). The government agency formed in 2012 to implement the national digital agenda has largely failed to deliver on its promises. The country’s lag is considerable when it comes to ultra-broadband and next-generation access (NGA) technologies. The new government strategy, passed in March 2015, aims to bridge this gap through 6 billion euros worth of public investments and an equal amount of private funds.



Since 2012, despite improving its score, China (62nd) has dropped 11 places in the overall rankings because other countries have improved faster than it has. As China grows, the capacity of all stakeholders across the country to embrace technology will determine its ability to accelerate its transition from a middle-income country to a high-income country. China is becoming more innovative. Patent applications—an imperfect measure of innovation capacity—have shot up since 2000. Countless corporations have gone from being mere manufacturers to being inventors and commercializing their own product under their own name. Academic standing has also improved dramatically. But for ICTs to have a truly transformative impact on Chinese society and economy, they have to permeate the entire society, including rural areas. Tertiary education should become more widespread—not just reserved for the elite. And despite a handful of corporate success stories, the culture of entrepreneurship and startups has yet to take root in a country where state-owned enterprises still dominate many segments of the economy. A more conducive business environment would help a great deal—China currently ranks a mediocre 104th. At least the government recognizes the critical role of ICTs and innovation in sustaining the growth momentum. This commitment is reflected China’s 39th rank in the Government usage pillar—its best pillar performance.

Mexico ranks 69th, up from 79th. This improvement is largely attributable to a revision of the mobile telephony tariff data, which causes the country to leapfrog 89 places in the Affordability pillar. Mexico ranks 4th on this pillar which includes mobile and broadband tariffs, both based on 2013 data. The challenges in the other areas remain considerable. Mexico ranks no better than 56th in the other nine pillars, and lies beyond the 50th mark in 43 of the 53 individual indicators composing the NRI. The poor quality of both the country’s business and innovation environment (87th) and its overall regulatory framework (70th) is especially problematic. The level of taxation (117th) and the shortcomings of its legislative process and judiciary system contribute to this situation. The country’s capacity to leverage ICTs is further limited by the level of education of the population, which translated to an unflattering 92nd rank in the Skills pillar, Mexico’s worst showing among the 10 pillars. ICT uptake among businesses (72nd) and the population at large (87th) remains very low, not only in global comparison but even within the region, which is known for its low level of ICT adoption. There are few signs that ICTs are having any significant impacts on economy (72nd) or society (76th), as reflected in the weak innovation capacity of Mexican business (72nd) and the small share of the country’s workforce employed in knowledge-intensive activities.

Despite a score unchanged from last year, South Africa loses five positions to settle at 75th place in this

edition. The country’s overall political and business environment remains one of its strengths (31st). In contrast, the general state of ICT readiness remains very low (102nd), the result of the poor quality of ICT-related infrastructure (85th), notably the limited international Internet bandwidth (128th).23 The cost of ICTs in South Africa is also a drag (107th). Nonetheless, individual usage has further increased with a 10-place jump to reach 68th. However, government still lags behind (105th), earning very low marks in terms of online services provided to the population (82nd). Overall, the potential of ICTs has not been fully unlocked. Their social impacts have not yet materialized, and they have not significantly improved access to basic services (101st) or facilitated citizens’ e-participation (88th).

Asia’s third and the G-20’s fourth most populous country, Indonesia ranks 79th in the NRI.24 Although there is ample room for improvement in every section of the NRI, Indonesia’s performance is relatively consistent and encouraging in many respects. The country ranks a remarkable 35th worldwide in the Business usage pillar, up 14 places since 2012—an indication that more and more Indonesian businesses are adopting ICTs to improve their operations and expand their activities. The government, in contrast, is not as quick at embracing ICTs and promoting e-government. Despite its commitment and a number of ICT initiatives, effects are long overdue. Among the population at large, mobile telephony has become ubiquitous. By ITU estimates, the entire population is within range of a mobile network of second generation or better. Indeed, Indonesia boasts one of the highest mobile subscription rates (125 per 100 population, 49th) among emerging and developing Asian nations, not far from leading Malaysia (145 per 100 population) and Thailand (140 per 100 population). And when it comes to mobile broadband subscriptions—the condition for accessing the Internet—Indonesia is second only to Thailand in the region. Yet Internet use remains scant: only 16 percent of the population are connected.

Down 15 places, Brazil (84th) posts one of the largest declines of this edition, dropping by 10 places or more in six of the ten NRI pillars. Since the 2012 edition, the country has slumped 19 places, and it does not appear in the top 50 of a single pillar. Its performance is particularly dismal in the Political and regulatory environment and Business and innovation environment pillars, where it ranks 95th and 121st, respectively (although it improves by 14 places in the latter category). The country’s level of taxation (137th), the extent of its red tape—Brazil notably ranks 137th for the time required to start a business—and delays of its judicial system are among the many institutional weaknesses that explain this situation. The lack of preparedness (108th) of the population, measured by the general level of education, acts as another drag on the country’s capacity to leverage ICTs more fully. The use of ICTs among the population has been improving, but not as quickly as in



other countries, causing Brazil to slip down the ranking to 62nd in this dimension. Furthermore, the government has failed to make ICTs a core driver of its development strategy (106th). Consequently, the economic and social benefits from ICTs remain very limited (76th and 73rd, respectively).

At 89th, India is the lowest-ranked of the BRICS. Since 2012, the country has failed to improve its score and lost almost 20 places. Despite many clusters of excellence and its knack for frugal innovation, India is not leveraging ICTs for the benefits of its entire population. The country places in the bottom half of the rankings of seven NRI pillars, and beyond the 100th mark in four. Uptake of ICTs in India is among the lowest in the world. When accounting for multiple SIM-card ownership, approximately one-third of the population owns a mobile phone. Smartphones are the privilege of the very few, with 3 mobile broadband subscriptions for every 100 population. Only 15 percent of the population uses the Internet. By international standards, technology adoption by businesses remains limited, as it does within the government. Despite its successes and international visibility and recognition, the vibrant IT and business process management industry accounts for only 0.6 percent of all jobs.25 The need for India to embrace technology to power its economy is arguably less pressing than it is for the other, richer BRICS economies, given its stage of development. Yet ICTs could do wonders in improving productivity in agriculture and the services sector, while boosting access to some basic services among the rural population. Furthermore, ICTs could help fulfill India’s ambition to become a global manufacturing hub. A most encouraging result amid India’s mediocre performance is the country’s 1st position in the Affordability pillar, as a result of the fierce competition within the vibrant telecommunications sector.

Argentina moves up nine positions to reach 91st place in this edition, its best performance since 2012. The assessment of the country’s ICT-related infrastructure (79th) significantly benefits from its increase in international Internet bandwidth capacity, which doubled in 2013 thanks to a new submarine cable connecting Argentina with Uruguay and Brazil. Individual usage also improves (54th) and remains a relative strength of the country, in terms of mobile subscriptions (12th), Internet use (53rd), and fixed broadband subscriptions (49th). Yet the challenges Argentina faces are many and significant. The country’s performance is considerably hampered by its dismal political and regulatory framework (128th) and its business and innovation environment (118th). In particular, Argentina’s judicial system performs badly both in terms of independence (126th) and efficiency (142nd out of 143 when it comes to challenging government regulations). Intellectual property protection is poor (135th) and venture capital scarce (137th). The quality of its business environment is further hindered by the highest total tax rate in the world—equivalent to 137 percent of

profits—weak local competition, and numerous barriers to business creation. The government’s lack of leadership when it comes to ICTs is also particularly worrisome (115th).

CONCLUSIONSAs a general-purpose technology, ICTs hold the potential of transforming economies and societies. They can help address some of the most pressing issues of our time and support inclusive growth. With the Networked Readiness Index, the World Economic Forum, Cornell University, and INSEAD assess the ability of countries to leverage ICTs for increased competitiveness and well-being. In doing so, this Report aims to provide policy guidance to decision makers, as well as to inform multi-stakeholder dialogue.

The results of the NRI reveal that the ICT revolution has not yet spread around the world. The capacity of a country to benefit from ICTs is strongly influenced by its stage of development. Indeed, the drivers of networked readiness are often the same as the drivers of development in general. Northern and Western Europe and the Asian Tigers continue to dominate the NRI. Yet the results point to a wide-ranging number of success stories, from the Baltic countries to the Gulf countries, the Caucasus, and Central America.

Yet ICT potential is held up by limited uptake in many countries. ICTs are far from being ubiquitous, and they are not yet spreading as quickly as many believe. The mobile revolution that began in the mid-1990s remains unfinished. Approximately half of the world’s population does not own a mobile phone, and many parts of the world are not yet covered by a cellular network. And even when universal penetration has been achieved, it is not a panacea because the most promising ICT applications require more than voice and SMS.

The developing world needs universal, reliable, and affordable Internet. Less than 10 percent of the population of low-income countries use the Internet. Current trends and technological developments suggest that the Internet revolution will be a mobile one. Given the lack of infrastructure and the cost of fixed broadband access, mobile broadband (i.e., 3G and above) is becoming the technology of choice, but it remains prohibitive in too many countries.

Furthermore, all countries—even the most advanced—must pay attention to the growing gap within their borders between the younger and the older generations, the urban and rural dwellers, the information-rich and the information-poor, the digitally literate and the those left behind. If ICTs are indeed an amplifier of potential and capabilities, then it is likely that this gap will increase in the coming years unless concerted action is taken to correct it.

Even though the NRI framework does not directly address these intra-country digital divides, one of its



premises is that the ICT revolution does not depend on access alone and cannot happen in a vacuum. The quality of the ecosystem and the preparedness of the population are paramount to ensuring that everybody benefits.

Policymakers and their partners must adopt a long-term, holistic vision to address those challenges. This requires smart long-term investments in infrastructure and education. But they can earn quicker, easier wins by adopting sound regulation aimed at promoting competition, innovation, and private investment. In the following chapters, leading experts and practitioners present solutions for a growth-supportive and inclusive ICT revolution.

NOTES 1 For example, Hall and Jones 1999; Caselli 2005; Gourinchas and

Jeanne 2006.

2 World Economic Forum 2014.

3 Draca et al. 2006; Cardona et al. 2013.

4 Dutta et al. 2012.

5 See Dutta et al. 2012 for a more detailed description of each component.

6 For instance, the prevalence of Internet in schools would ideally be measured by computing the percentage of a country’s schools that have Internet access. Similarly, the intensity of competition would ideally be measured by computing a business concentration index (Herfindahl–Hirschman Index). In both cases, however, such statistics are not available for enough countries.

7 See http://icp.worldbank.org/ for more information about PPP and the 2011 revision. For more information about indicators 4.01 and 4.02, refer to the Technical Notes and Sources at the end of this Report.

8 It must be noted that in the case of Hong Kong SAR and Taiwan (China), data remain unavailable for four key indicators: PCT patents (indicator 7.03), Government Online Service Index (8.02), ICT PCT patents (9.02), and E-Participation Index (10.04). Other evidence suggests that both economies tend to perform well in the areas of innovation and e-government. Therefore, the data gaps likely penalize these two economies and the overall results should be interpreted with caution.

9 Trend analyses are based on a constant sample of the economies that have been covered in every NRI edition since 2012. The 2014 IMF classification was used to compute the averages in every edition.

10 ITU 2014.

11 The analysis in this paragraph is based on a sample of 188 economies for which data on mobile telephony subscriptions and population existed for every year over the period 1997–2013. The country classification by income is from the World Bank (situation as of July 2014). The breakdown is as follows: 63 high-income countries, 49 upper-middle-income countries, 44 lower-middle-income countries, and 32 low-income countries. Penetration rates are weighted by population. Detailed calculations are available from the authors ([email protected]).

12 ITU 2014.

13 ITU 2014.

14 Bilbao-Osorio et al. 2013.

15 United Nations 2014, Goal 9, p. 17.

16 The analysis covers 165 countries for which data on Internet penetration and population is available for every year over the period 1997-2013. The country classification by income is from the World Bank (situation as of July 2014). The breakdown is as follows: 62 high-income countries, 41 upper-middle-income countries, 37 lower-middle income countries, and 25 low-income countries. Penetration rates are weighted by population. Detailed calculations are available from the authors.

17 Amega-Selorm et al. 2009. An IXP is a physical connection point that helps keep local Internet traffic local. This reduces costs associated with traffic exchange between Internet Service Providers (ISPs).

18 ITU 2014.

19 This is the median time in years necessary for countries of a given income group to increase Internet penetration and the number of mobile telephone subscriptions per 100 population to the specified threshold. Time is measured from the latest year at the end of which the Internet penetration rate and the number of subscriptions were less than, respectively, 1 percent and two subscriptions.

20 The Economist 2014.

21 See http://www.ixptoolkit.org/. For more information about IXPs, see also Amega-Selorm et al. 2009.

22 IEAG 2014, p. 2.

23 Note that the International Telecommunication Union (ITU) has revised indicator 4.03 time series for South Africa, which explains the country’s large drop, from 73rd to 128th, on this indicator.

24 Indonesia’s drop of 15 spots since last year is mostly attributable to its plunge of some 60 places in the Affordability pillar (99th). This, in turn, is largely the result of a major update by the World Bank and its partners of the data used to estimate costs of living throughout the world (see the Technical Notes and Sources at the end of the Report for more details). A comparison of Indonesia’s overall rank over time, therefore, is largely spurious.

25 World Economic Forum 2014, Chapter 1.1, Box 2.

REFERENCESAmega-Selorm, C., M. Mureithi, D. Pater, and R. Southwood. 2009.

Impact of IXPs: A Review of the Experiences of Ghana, Kenya and South Africa: Final Version. Open Society Institute.

Bilbao-Osorio, B., S. Dutta, T. Geiger, and B. Lanvin. 2013. “The Networked Readiness Index 2013: Benchmarking ICT Uptake and Support for Growth and Jobs in a Hyperconnected World.” The Global Information Technology Report. B. Bilbao-Osorio, S. Dutta, and B. Lanvin, editors. Geneva: World Economic Forum.

Browne, C., A. Di Battista, T. Geiger, and T. Gutknecht. 2014. “The Executive Opinion Survey: The Voice of the Business Community.” In The Global Competitiveness Report 2014–2015. K. Schwab, editor. Geneva: World Economic Forum. 85–96.

Cardona, M., T. Kretschmera, and T. Strobel. 2013. “ICT and Productivity: Conclusions from the Empirical Literature.” Information Economics and Policy 25 (3): 109–25.

Caselli, F. 2005. “Accounting for Cross-Country Income Differences.” In Handbook of Economic Growth, 1st Edition, Volume 1. P. Aghion and S., Durlauf, editors. Elsevier North-Holland. 679–741.

Draca, M., R. Sadun, and J. Van Reenen. 2006. “Productivity and ICT: A Review of the Evidence.” CEP Discussion Paper No. 749. Centre for Economic Performance (CEP). August.

Dutta, S., B. Bilbao-Osorio, and T. Geiger. 2012. “The Networked Readiness Index 2012: Benchmarking ICT Progress and Impacts for the Next Decade.” In The Global Information Technology Report 2012. S. Dutta and B. Bilbao-Osorio, editors. Geneva: World Economic Forum. 3–34.

The Economist. 2014. “The Rise of the Cheap Smartphone.” The Economist April 5.

Gourinchas, P.-O. and O. Jeanne. 2006. “The Elusive Gains from International Financial Integration.” Review of Economic Studies 73 (3): 715–41.



Hall, R. E. and C. I. Jones. 1999. “Why Do Some Countries Produce So Much More Output per Worker than Others?” The Quarterly Journal of Economics 114 (1): 83–116.

IEAG (Independent Expert Advisory Group on a Data Revolution for Sustainable Development). 2014. A World that Counts: Mobilising the Data Revolution for Sustainable Development. November. Available at http://www.undatarevolution.org/wp-content/uploads/2014/12/A-World-That-Counts2.pdf.

ITU (International Telecommunication Union). 2014. Measuring the Information Society Report 2014. Geneva: ITU.

———. 2015. World Telecommunication/ICT Indicators. December 2014 edition. Geneva: ITU.

United Nations. 2014. Report of the Open Working Group of the General Assembly on Sustainable Development Goals. Available at http://undocs.org/A/68/970.

World Bank. 2015. World Development Indicators database (accessed on various dates in January and February 2015).

World Economic Forum. 2014. The Global Competitiveness Report 2014–2015. K. Schwab, editor. Geneva: World Economic Forum.



This appendix presents the structure of the Networked Readiness Index (NRI) 2015. As explained in the chapter, the NRI framework separates environmental factors from ICT readiness, usage, and impact. That distinction is reflected in the NRI structure, which comprises four subindexes. Each subindex is in turn divided into a number of pillars, for a total of 10. The 53 individual indicators used in the computation of the NRI are distributed among the 10 pillars.

In the list below, the number preceding the period indicates the pillar to which the variable belongs (e.g., indicator 2.05 belongs to the 2nd pillar; indicator 8.03 belongs to the 8th pillar). The numbering of the indicators matches the numbering of the data tables at the end of the Report.

The computation of the NRI is based on successive aggregations of scores, from the indicator level (i.e., the most disaggregated level) to the overall NRI score (i.e., the highest level). Unless noted otherwise, we use an arithmetic mean to aggregate individual indicators within each pillar and also for higher aggregation levels (i.e., pillars and subindexes).a

Throughout the Report, scores in the various dimensions of the NRI pillars are reported with a precision of one decimal point. However, exact figures are always used at every step of the computation of the NRI.

Indicators that are derived from the World Economic Forum’s Executive Opinion Survey (the Survey) are identified here by an asterisk (*). All the other indicators come from external sources, as described in the Technical Notes and Sources section at the end of the Report. These are transformed into a 1-to-7 scale in order to align them with the Survey’s results. We apply a min-max transformation, which preserves the order of, and the relative distance between, the scores.b

NETWORKED READINESS INDEX 2015

Networked Readiness Index = 1/4 Environment subindex + 1/4 Readiness subindex + 1/4 Usage subindex + 1/4 Impact subindex


Environment subindex = 1/2 Political and regulatory environment + 1/2 Business and innovation environment

1st pillar: Political and regulatory environment1.01 Effectiveness of law-making bodies*1.02 Laws relating to ICTs*1.03 Judicial independence*1.04 Efficiency of legal system in settling disputes*c

1.05 Efficiency of legal system in challenging regulations*c

1.06 Intellectual property protection*1.07 Software piracy rate, % software installed1.08 Number of procedures to enforce a contractd

1.09 Number of days to enforce a contractd

2nd pillar: Business and innovation environment2.01 Availability of latest technologies*2.02 Venture capital availability*2.03 Total tax rate, % profits2.04 Number of days to start a businesse

2.05 Number of procedures to start a businesse

2.06 Intensity of local competition*2.07 Tertiary education gross enrollment rate, %2.08 Quality of management schools*2.09 Government procurement of advanced technology

products*

Appendix: Structure and computation of the Networked Readiness Index 2015



READINESS SUBINDEX

Readiness subindex = 1/3 Infrastructure + 1/3 Affordability + 1/3 Skills

3rd pillar: Infrastructure3.01 Electricity production, kWh/capita3.02 Mobile network coverage, % population3.03 International Internet bandwidth, kb/s per user3.04 Secure Internet servers per million population

4th pillar: Affordabilityf

4.01 Prepaid mobile cellular tariffs, PPP $/min.4.02 Fixed broadband Internet tariffs, PPP $/month4.03 Internet and telephony sectors competition index, 0–2

(best)

5th pillar: Skills5.01 Quality of educational system*5.02 Quality of math and science education*5.03 Secondary education gross enrollment rate, %5.04 Adult literacy rate, %

USAGE SUBINDEX

Usage subindex = 1/3 Individual usage + 1/3 Business usage + 1/3 Government usage

6th pillar: Individual usage6.01 Mobile phone subscriptions per 100 population6.02 Percentage of individuals using the Internet 6.03 Percentage of households with computer6.04 Households with Internet access, %6.05 Fixed broadband Internet subscriptions per 100

population6.06 Mobile broadband Internet subscriptions per 100

population6.07 Use of virtual social networks*

7th pillar: Business usage7.01 Firm-level technology absorption*7.02 Capacity for innovation*7.03 PCT patent applications per million population7.04 Business-to-business Internet use*g

7.05 Business-to-consumer Internet use*g

7.06 Extent of staff training*

8th pillar: Government usage8.01 Importance of ICTs to government vision of the future*8.02 Government Online Service Index, 0–1 (best)8.03 Government success in ICT promotion*

IMPACT SUBINDEX

Impact subindex = 1/2 Economic impacts + 1/2 Social impacts

9th pillar: Economic impacts9.01 Impact of ICTs on new services and products*9.02 PCT ICT patent applications per million population9.03 Impact of ICTs on new organizational models*9.04 Employment in knowledge-intensive activities, %

workforce

10th pillar: Social impacts10.01 Impact of ICTs on access to basic services*10.02 Internet access in schools*10.03 ICT use and government efficiency*10.04 E-Participation Index, 0–1 (best)

NOTES a Formally, for a category i composed of K indicators, we have:

When two individual indicators are averaged (e.g., indicators 1.04) and 1.05 in the 1st pillar), each receives half the weight of a normal indicator.

b Formally, we have:

6 x country score – sample minimum

+ 1 ( sample maximum – sample minimum ) The sample minimum and sample maximum are, respectively, the

lowest and highest country scores in the sample of economies covered by the GCI. In some instances, adjustments were made to account for extreme outliers. For those indicators for which a higher value indicates a worse outcome (i.e., indicators 1.07, 1.08, 1.09, 2.03, 2.04, 2.05, 4.01, and 4.02), the transformation formula takes the following form, thus ensuring that 1 and 7 still corresponds to the worst and best possible outcomes, respectively:

– 6 x country score – sample minimum

+ 7 ( sample maximum – sample minimum ) c For indicators 1.04 and 1.05, the average of the two scores is

used in the computation of the NRI.

d For indicators 1.08 and 1.09, the average of the two normalized scores is used in the computation of the NRI.

e For indicators 2.04 and 2.05, the average of the two normalized scores is used in the computation of the NRI.

f The affordability pillar is computed as follows: the average of the normalized scores of indicators 4.01 Prepaid mobile cellular tariffs and 4.02 Fixed broadband Internet tariffs is multiplied by a competition factor, the value of which is derived from indicator 4.03 Internet and telephony sectors competition index. It corresponds to the score achieved by an economy on this indicator normalized on a scale from 0.75 (worst) to 1.00 (best), using the min-max transformation described above. A normalized score of 0.75 is assigned to an economy with a competition index score of 0, which means that a monopolistic situation prevails in the 17 categories of ICT services considered. A normalized score of 1.00 is assigned to an economy where all 17 categories are fully liberalized. Where data are missing for indicator 4.03 (i.e., Mongolia, Puerto Rico, Timor-Leste, and Venezuela), the score on the affordability pillar, which is simply the average of the normalized scores of indicators 4.01 and 4.02, is used. The competition index score for Taiwan, China, was derived from national sources.

g For indicators 7.04 and 7.05, the average of the two scores is used in the computation of the NRI.

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